The Current Gold Market Price

Gold Market Price

"What is the gold market price right now?" is not a simple query to answer, because the information is always changing from day to day and hour to hour. As I write this article, the price of gold is 929.40 dollars per ounce. But the previous 30 days has gone through a wide range of gold prices, from a high of $993.20 per oz. to a low of $897.30 per ounce. That's a 10% fluctuation within the span of a single month.

Why does the gold market price change so much? Well the price of gold depends on supply and demand. When the average joe like you or me buy gold items such as jewelry, or buy gold investments like bullion bars and coins, demand increases and the price goes up. Then when prices rise quite high and everybody decides to cash in on the high prices by selling, demand goes down and price goes down too. This supply-demand dynamic is of course affected not only by individual purchases and investments, but also by industrial demand for gold.

One thing that is heavily affecting demand for gold these days is the economic uncertainty facing the U.S. and the world as a whole. Oftentimes you will notice that when there is good economic news then the gold prices will drop, but when there is bad economic news the price will rise. Why is that, you ask? Because gold is seen as a safe-haven for your wealth. Regular paper currencies can lose their value and your buying power can decrease. In an extreme situation, the paper currency might lose almost all of its value.

Perhaps the most famous example of this was Weimar Germany in the 1920s, when the currency inflated so drastically that there was a daily doubling of consumer prices. One famous image of that period is the sight of people using wheel barrels full of paper money instead of firewood to heat their homes, because the money was worth less than wood. There are no indications yet that our economic forecast is as bad as that, but in times of trouble knowledgeable investors normally move a portion of their money into gold to protect themselves in case of the worst case scenario -- a drastic drop in the value of the currency.

If the current problems end soon, then we will most likely see gold prices drop. If the problems persist for years to come as I think they will, then the gold price will continue to go up (with dips in price as well).The main reason I think the gold price will keep rising in the future is that governments around the world are spending more money than they have, devaluing their currencies over time. If you hold fiat currencies, your wealth will diminish. If you have gold on the other hand, your wealth will be maintained. The gold market price reflects the trends in fiat currency value.

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