Why does the gold rate fluctuate every day?

We all live in a country where almost every person is fond of wearing gold ornaments. According to the studies, India is the one country that has the maximum gold with them as people here are into the regular purchase of gold. No function or Indian ceremony is complete with the purchase of gold. Even this is a fact that everyday gold prices fluctuate. The gold rate today will be surely different from the gold rate from yesterday and tomorrow. Every person that moves out for the purchase of gold is charged with the current rate of the gold that is prevailing in the market.

Have you ever thought about why all these fluctuations are being there in the price of gold? It is common all across the globe. For the last few months, the gold prices have been on the roller coaster ride and it is reaching high prices and also coming down to extreme depths. Many reasons are lead to the fluctuation in gold prices. Let’s have a look at them.

  • Central bank actions: It is a fact that investment in gold is one of the safest options as the gold reserves of the country are managed by the central bank i.e RBI. Any of the decisions that are taken by the central bank can have a direct impact on the gold rates. For example, if China decides to offload some of the gold reserves, it can lead to a huge impact on gold loans. So the actions of the central banks need to be monitored to know about the gold rate fluctuations.
  • Government policies: The government policies have direct as well as indirect impacts on the gold rates in the country. All the policies of the government will play a major role in the global gold rates. For example, If the United States government cut down on the interest rates, a huge crash in the rate of gold can be easily seen that can affect the gold prices.
  • Demand and supply: It is a fact that demand and supply of the product in the market have a huge impact on the price of the products. Gold is a natural resource and its reserves are limited on the earth. It is seen that the gold demand in the market has immensely increased. But the reserves of supply are limited. This is the reason there is a huge rise seen in the prices of gold.
  • Currency changes: Even the currency rates can have a huge impact on gold prices. Any increase or decrease in the local currency can have the price change of gold. Earlier, the gold rates were inversely proportional to the US dollar, so whenever the price of the dollar goes up, the gold prices come down and vice versa.

Investment in gold is anytime a safe option. This investment will indeed give good returns in the future. 5paisa is a platform where people can get all the latest information regarding gold prices.

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