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4 Factors That Boost Gold's Price

By    |   Sunday, 12 July 2015 12:15 PM

Adverse events around the world and a tightened economic policy at home can help to boost the price of gold, which is sensitive to such fluctuations.

Here are four factors that boost the price of gold.

1. War and World Crises
Since gold is tied to currency, in times of great strife — whether terrorist or insurgent violence, outbreaks of war, even devastating natural events — gold is seen as the safer choice as government stability is shaken.

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2. A Weakened U.S. Dollar
News from the Federal Reserve's Federal Open Market Committee on economic policy moves the needle on gold prices. If interest rates rise, which is expected from the Fed later this year, gold values increase, TheCheatSheet.com noted.

3. Demand Surges
If the global market for gold increases, it could cause gold prices to rise, Investopedia noted, following along with a natural supply-demand equation. Another demand factor stems from gold-mining itself. Analysts note the contraction in that sector as gold becomes more difficult as well as costly to mine. With that shrinking, gold prices could go up.

4. Certain Economic Indicators
When economic benchmarks like gross domestic product slow down amid flat-lining economic growth, that can mean a boon for gold, The Wall Street Journal said. "Gold doesn’t pay interest or dividends and has an easier time competing with yield-bearing assets like bonds and stocks when (interest) rates are pinned near zero," the Journal reported as the Fed ponders its first interest rate hike since 2006.

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Adverse events around the world and a tightened economic policy at home can help to boost the price of gold, which is sensitive to such fluctuations.
gold, factors, boost, price
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2015-15-12
Sunday, 12 July 2015 12:15 PM
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