These days many investors are fascinated by the idea of investing in gold. But you also hear a lot about the gold prices touching records highs. Just few days back, gold scaled the Rs 30,000 level for the first time in the domestic market as the global prices rose on the rush towards the yellow metal with weakening rupee adding to the pressure. The yellow metal’s 34% rally this year has been on account of the investor worries over the euro zone and the U.S. debt burden and euro zone debt burdens and also their impact on currency markets.
Investors have many options available for them to make any kind of investments. The investors can invest in commodity trading, forex trading, gold investments, stocks, real estate, silver investments and others. For any kind of investment, the work timing is the most important aspect. If the timing is not right, then you will not be able to win the game in the end and get into unwanted troubles. Same applies to gold investments as well. You also need to be sure when you are investing in gold, your time for investments in the correct manner to ease yourself from unwanted problems.
Factors affecting the prices of gold
1. Economics of supply and demand: If the demand for gold rises and supply cannot meet the demand then the prices will increase. Also, if the production of gold is hit on account of a miners’ strike and supply dips then also it will lead to rise in prices.
2. Gold and other policies of central bank: Banks very often invest in gold as a hedge against inflation. Other policies on interest offered on savings also affect the prices. Lower interest leads to increase in gold buy and higher interest will lead to people investing in currency.
3. Prevailing social conditions: During the times of emergencies and war, the prices of gold rises as the value of prevalent currency are in doubt. Since all are aware of value of gold, the people try to buy as much gold they can and push up the price of gold.
4.State of the economy: State of the economy is also the important factor to be taken into consideration. If the economy is in a state of despair with markets performing in a ragged manner like now, the prices of gold will rise on account of more people choosing to invest in gold.
5. Value of the US dollar: As the dollar is the currency that many people incest in any fall in its value can lead to prices of gold rising.
Gold investments are very simple and so even first-time investors prefer to invest in gold and not look at other investment options. So, to invest in gold you need to weigh your pros and cons of choosing the investment vehicle over others.