Gold has done well over the past few weeks. As a result gold buyers are now paying even more for your items. Why is gold going up? There are many reasons for it. It can be a rather complex equation to see what the causes are, but we will just approach a few of the main items.
Why does gold go up?
First and foremost, the strength of the currency in which the country you are in makes a very big difference. The US Dollar for instance is rather strong right now, but has weakened some over the past month. What does this mean? Well, to simplify it as much as possible, it just takes more of the currency (dollars) to buy the same amount of gold. It does not have the same “strength” it had against gold previously. As the dollar grows stronger, gold appears to go down in price since it takes less of our dollars to buy it.
Another major reason is supply and demand. How much is it costing miners to pull it out of the ground? How much are gold buyers buying and then recycling? Is the demand for gold coins are jewelry up or down? This causes the supply chain to potentially have too little or too much of the precious metal causing differences in price.
One area that leads into supply and demand is the Fear index. This mainly applies to traders and investors of commodities and stocks, but can reach anyone. If you fear that your currency is going to be devalued for some reason, trading it for gold can help protect yourself against a loss of value of the dollar and inflation.
The topic really is more complex than this. This is a general gist of the main items that affect the change in gold prices.