Reasons for the rise in gold price

Dollar crisis : A weak dollar in the wake of the recession has forced people to invest in gold which in the long run would fetch more returns. dollar is likely to fall further leading to a further increase in gold prices.

Low saving rate : with banks offering lower interest rates, fixed deposits make little sense. It is cheaper to even borrow money to invest in gold. Because of low interest rate investors are attracted towards investing in gold because of getting more returns.

Inflation : Gold has always been a good to fight inflation. Rising inflation rate appreciates gold prices. With inflation rising to record high, gold will prove to be a safe bet. Every investors should invest in the gold at the right time and sell it at the right time to get the huge returns.

Economic crisis: Gold has always given high returns over a long term. As the crisis triggered a fall in markets across the globe, many investors wary of investing in stock, or bonds, found refuge in gold. Gold is globally accepted and easily convertible into cash.

A fall in gold supply : Gold mining is decreasing and the demand for the gold is increasing. Gold supply had reduced by almost 40% as the cost  of mining, legal formalities and geographical problems have rises which has led to a fall in gold mining.

Political concerns : Whenever there is a crisis, war, terrorist attack etc, investors rush to prevent erosion of their investments and gold as a safe haven. The gold price tends to increase whenever any problems take place in the country it may be man-made or natural calamities.

Festivals : Indians are among the largest consumers of gold. Gold has been used as ornaments and gifted during festivals and weddings. so there is the huge demand of the gold festive seasons which makes the hike in the price of gold which grab the investors attention to invest in the gold.     

 

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