Investors that invested in gold are making money. Gold price increased almost 29% since the beginning of the year and ounce of gold is worth $1,355.50. According to experts, gold will keep rising due to uncertainty after Brexit. UBS estimates gold to be at $1400 per ounce at the end of 2016. Credit Suisse as well as Bank of America expect gold to be at $1500 per ounce, which would represent another $140 increase.
Gold is becoming more popular amongst households and individual investors as well. According to Golden Gate every fifth economically active person in Western Europe invests in gold. Increased demand for gold investments is most likely caused by series of recent events. Brexit and steady interest rates in USA are probably the most significant ones. Gold is very responsive to interest rates in USA. After Fed decided not to increase them, gold skyrocketed. Higher interest rates lead to greater fixed income securities yield which may compete with gold. Below we can see the historical price of gold since 1986.
Many factors influence the price of gold. Gold prices change every few seconds and there are an unlimited number of components that play a role in the price of gold. Some of the reasons for changes in gold prices according to Apmex include: Current events, market speculation, currency values, supply and demand and buying power.
Large entities and governments typically have substantial buying power and can impact the price of gold per ounce and the gold market. If a government makes a large gold purchase, their demand for the product could affect gold markets immediately. Supply and demand determines prices for commodities and the price of gold is no exception. For investors who buy and sell gold regularly, staying current with fluctuations in the market is crucial to financial success.