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Change is the Only Constant - Pretty Much True for Gold!

By PolicyBazaar

Invest in GOLD and give a boost to your investment portfolio

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Published: 28 March 2020Last Updated On: 18 January 2021

Smartest investment and life plans in UAE

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You know, there are a few things in life, where irrespective of how hard you try to maintain the stability of things, the universe will look for a way out of it. Change is inevitable in our world, especially in the case of commodities. What holds value today may become junk tomorrow.

Gold, on the other hand, has managed to maintain its position as a precious metal for years now. However, even gold could not save itself from changes entirely.

Fluctuations in the gold rate in UAE and other parts of the world is a common trend, almost changing every day. In fact, seeing extremes in terms of gold rates is not a rare phenomenon. For the past few months, there have been a lot of fluctuations in the gold prices.

Now, it is only common for you to wonder why the gold rates have been fluctuating. The existence of gold has been there for centuries, hence, it has passed the test of time. Some of you may think that gold should have become immune to fluctuations by now. However, that’s not the case of course. Gold is no different from any other commodity when it comes to prices- there’s no guarantee.

Here are some reasons behind the fluctuation of gold rates.

Investment Trends

Usually, this precious yellow metal is considered a safe option for investment. But with the new opportunities for investment opening up for people, they have started to experiment. Gold doesn’t offer very lucrative results and this expectation of high returns makes investors move away from it.

This leads to fluctuation in demand & supply, which in turn has an impact on the prices. Changing the needs of an investment may cause fluctuation in gold prices.

Government Policies

The government policies can either have a direct or indirect effect on the rates of gold in a certain country. The policies of the economically strong players may have implications on the gold rates internationally too.

For instance, the United States Government’s impending decision of cutting down rates of interest caused a large change in the prices of gold throughout the globe, sending the rates crashing even though it was a temporary thought. Such actions by the major producers of gold may have an effect on gold prices across different continents. 

International Relationship

Global relations play the main role in the fluctuation of gold prices. More often than not, gold is considered to be a ‘crisis metal’ as it has the ability to maintain its relevance even at the time of geopolitical crises and wars.

Strained international relationships between the producers and other important countries can push the rates higher. On the other hand, good international relationships between these nations can bring the rates down.

 Demand & Supply

Most of the economies in the world survive on the demand-supply chain. Gold is a natural resource that is available only in some of the places and the gold production is limited to its availability. The demand for gold is huge from across all the quarters; however, the limited supplies ensure that the gold prices play a game of hide and seek.

 Changes in the Currency

Generally, the gold is traded in the international markets in international currencies, and the US Dollar is the most sought after trading currency. If there is any alteration in their local nation, it can have an effect on international trading, either pushing up rates or decreasing them. 

In a Nutshell!

The gold prices show fluctuations all around the world frequently. They are affected by various national and international factors as mentioned above. It is important that you understand these factors before making an investment in gold. This article will help you in understanding how change is the only constant when it comes to gold.