There are many factors that affect the location of the gold price. Almost 95% of total trade in gold is made by day traders in the futures market that gold price is highly dependent on market sentiment and the obligation of dealers to buy or sell. Gold is a safe investment against the sky inflation and economic uncertainty, this is the reason why gold is rising steadily in recent times have seen. Since gold is traded in U.S. currency, it is also directly influenced by changes in exchange rates and a weaker U.S. dollar generally means an increase in gold prices. This is because investors buy the U.S. currency and the gold, their assets, as choose to sell the dollar fall further.
Supply and demand for physical gold has a great influence on the gold price. India and China are by far the largest consumer of gold in the world, and the demand for jewelry and precious metals at some point gold will run in both directions. The people of India have a tradition of accumulating gold jewelry as a sign of wealth and prosper as these countries are more serious and the physical demand for gold would be higher. On the other hand, gold jewelry is often considered a luxury item and in unstable economic times, demand for physical gold is in the Western economies, which can affect the price of gold.
The political and economic situation in the world affects the price of gold. During the recent recession, when interest rates fell to near historically low levels, the gold price is rising steadily. The reason is simple – if the rate drops investors money in interest-bearing accounts because there is less and less attractive to hang pour in cash and in commodities like gold.
The tensions in the Middle East have a direct impact on the price of gold, because gold strongly influenced by other resources such as oil. War in Iraq and instability in Iran play an important role in the recent spike in gold prices.
Let us now return to our original question – Is it time to sell gold? It’s a complicated question, but I think the short-term outlook for commodity prices is much higher and I think we have reached the peak of the gold price. Many financial advisers would recommend at least 5% of holdings in gold, I would even suggest at this time for gold to rise to 15% of your portfolio and your investment is diversified to protect your assets. On the other hand, there are good reasons to sell gold now, especially if you are in financial difficulties because prices have never been higher, and it is worth considering selling gold to other financial obligations. If you are on the verge of losing your home and are still the gold jewelry you inherited, I encourage you to look to buy on sale of gold.
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