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4 Factors That Lower Gold's Price

By    |   Sunday, 12 July 2015 12:30 PM

Gold prices can be volatile and can dip due to a host of factors including worrisome changes in world politics, expected interest rate hikes, the strength of the U.S. dollar as well as on the broader forecast of economies around the world, Forbes noted.

Here are four factors that lower the price of gold.

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1. World Politics
It is easy to correlate big world events to shifts in gold stability. Because gold itself is independent of currency, gold feels safe when a country's political or economic issues are spinning out of control. For example, gold prices rose in 2014 after Russians invaded Ukraine, creating instability in that region. At times of peace, gold tends to flatten.

2. Interest Rate Trajectory
One analyst for Wall Street Daily called the Federal Reserve the gold market's "big gorilla" in the room. With an hike in interest rates by the Fed expected later this year, gold prices could suffer. Typically, analysts note, gold prices fall of as investors sell gold to use that money for other, stronger investments.

3. The U.S. Dollar
A strong market for U.S. currency typically means that gold will trend weaker. Today's strong dollar has led commodities like gold to trade in a lingering bear market where at least some savvy investors may dive in and buy.

4. Macroeconomic Effects
Gold is often reactive to news of data on certain economic indicators like home and retails sales, manufacturing, unemployment and the gross national product, which serve to paint a picture of national health. If they're good, the dollar soars and gold falls off.

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Gold prices can be volatile and can dip due to a host of factors including worrisome changes in world politics, expected interest rate hikes, the strength of the U.S. dollar as well as on the broader forecast of economies around the world, Forbes noted.
factors, lower, gold, price
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2015-30-12
Sunday, 12 July 2015 12:30 PM
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