Gold has always been valuable, but recently, gold prices topped $1,923.70 per ounce. It’s the highest rate since 2013, meaning that those who buy gold pay more than ever before. The increase in gold prices is tied to many factors, including the current political climate, the international economy, and increased demand. 

4 Factors Driving Up the Prices of Gold 

1. Decreased US Dollar Value

Internationally, the value of gold ties to the American dollar. And the lower the value of the U.S. dollar, the higher the value of international currency and gold.

This relationship relates to gold in two ways. First, as Asian and European currencies strengthen, the demand for other commodities does also. For example, if oil, corn, and soybean demand increase, that need drives up gold’s price. Second, an investor will look to gold as a place to store value and buy gold when the U.S. dollar is weak, increasing the metal’s value. 

2. Geopolitical Factors

With conflicts brewing in several regions of the world, including the Middle East, and tensions between the U.S. and China over trade policy, gold prices spike. Generally speaking, during times of geopolitical turmoil, an investor views gold as a “safe haven” investment. This phrase means a fund’s value won’t waver from an economy’s instability. 

3. Increased Demand 

Gold is sought after for its value and beauty. In some parts of the world, it’s a vital part of their cultures. In India, for example, fine gold jewelry is closely entwined with the culture and standard of beauty. When worn, it displays a person’s wealth. As the global economy stabilizes and peoples’ incomes increase, more people around the world can purchase culturally valuable gold. And their purchases increase demands and overall prices. 

4. Protection from Inflation

As inflation rises, so does the price of gold. And investors hold onto gold to hedge the value against increasing inflation prices for other items and the U.S. currencies. The longer periods of inflation continue, the higher the prices of gold rise. Inflation today is higher than it was in 2013.

If you want to buy gold or get cash for your gold, American Trading Company can help. This family-owned pawn shop based in Cincinnati, OH, has been in business for more than 30 years. They provide expert insight to help you make informed decisions about precious metals and gems. They’re proud members of the American Numismatic Association and the Gemological Institute of America. For more information, call the Harrison Avenue location at (513) 661-3633 or the West Galbraith Road branch at (513) 385-6789. You can also learn more online.