How to Determine Gold Price Movements

By Taylor Raimee

Gold is odd as a commodity in that it operates a little differently than the other commodities because of its lower demand for industrial products.

Contrary to metals like silver and copper, gold's demand isn't the primary factor in its price movements, with Indian weddings being one of the top areas gold demand comes from.

There are of course other things like regular jewelry and some industrial uses, but those uses aren't near the uses driving the demand of other metals.

What gold prices primarily move on are in response to difficult economic times, and the threat or reality of inflation. That's where one must look to ascertain where the prices of gold may go.

Another element that must be watched is government interference in the markets, like we're having now, where it can have a direct impact on gold price movements.

I'm referring here to attempts to shore up the price of the U.S. dollar, so countries around the world, and American investors and consumers, continue to have confidence in it.

So when thinking of gold as a wealth building tool, it's more difficult to make happen than other precious metals, although those committing themselves to knowing the gold market and gold companies, do make money in it.

But as a commodity disconnected to everything else, it's primary purpose is safety and an inflation hedge.

Watching the factors that affect that are how to determine where gold prices are going. But the major event to watch is how much money the Federal Reserve, or whoever it is that prints money in your country, is printing.

By definition, inflation is printing money, and the effects of the devaluing of currency and the resultant inflation is what gold investors need to watch more than anything else.

Gold prices going up

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