Gold is often considered a hedge against inflation, but that has not always proved to be the case. When real inflation rates experienced by the person in the street and by investment funds are distinctly negative, as they are at the moment, then this tends to be strongly positive for gold.
That is why the latest gold price weakness should not be a longstanding concern for the gold buyer.
Gold is a non-interest generating asset – a fact that is often seen as price negative when the economy is strong and real rates are positive. This tends to make other assets more attractive.
Gold and Silver historical price Chart
Spot price table
The price tends to fluctuate up and down on the media and analysts’ interpretations of usually fairly obscure, and often ambiguous, statements from key Fed officials.
Here are 10 key price drivers that can affect current gold prices:
- U.S. Federal Reserve (and other major Central Bank) announced, or interpreted, policy initiatives.
- Inflation rate assumptions
- Day-to-day US data releases
- Gold ETF inflows and outflows
- Supply/demand fundamentals
- US dollar strength or weakness
- Investment perception (Animal Spirits)
- Central Bank purchases/sales
- Asian demand trends
- Black Swan events
Multi Metal, Unit & Currency Table
Some analysts see the Central Bank as one of the key factors in the gold supply/demand equation, specifically, the additions to, or subtractions from, the known national Central Bank gold holdings.
These volumes can make the difference between annual gold supply and demand being in surplus or deficit, and will thereby have a consequent impact on the gold price.
If you are looking into buying gold yourself, use the interactive table below to get an idea about gold prices in the UK. Where you are looking at the gold price of 1kg in the UK. Or you might want to know how much 100g of gold is.
Historical Performance Table
There are many reasons people find gold attractive – one of them is connected to inflation. Sometimes we don’t even notice that inflation is chipping away at the purchasing power of the pound, but it’s a fact of life.
If you look at the pound over the last decade, it now buys much less than it did, but gold has held its value over the same period. If you combine inflation with the very low level of interest paid on savings, gold becomes very attractive.
Gold is a finite resource – there’s only so much of it that’s ever been dug up, or ever will be. The cost of extracting new gold from the ground is now estimated to be close to or above the current trading price for 98% of mines, so it’s hard for supply to keep pace with demand.
The emerging markets of India and China have enormous impact on the world gold trade – they account for 60% of global world jewellery demand, and over 50% of the world’s gold coins. As those markets grow, so will demand.
Because we’re dealing with such a complex resource, no-one can offer certainties about quite how the price of gold coins will move.
The table below show the value of gold over the last 15 years. There are also display options in various units of measure vs. currency.
We can help you in your coin selection
You are always welcome to contact one of our gold experts on 0800 902 0000, to guide you through the selection and purchase process and discuss the best solution for your gold (or silver) needs. This way we can ensure you have a safe, professional and enjoyable experience.