In the USA, the price of gold can go up and down for a number of reasons. So the question is- what are the factors that can influence the price of gold in the marketplace? If you have no answer to the question, then you are in luck. In this article, we will talk about some of the reasons why the gold rate in us fluctuates.

Reasons why the Gold Price Fluctuates

There are several reasons why the gold price can fluctuate in the USA and below we will talk about some of these reasons-

Global Crisis

Gold prices have a tendency to rise when people have no confidence in the government or financial markets. World events usually have a massive impact on the price of gold, as gold is a source of safety in the economic tumult. For example, When Russians moved into the Ukraine, the price of gold spiked. The same thing can happen in any country, including the USA. Political chaos plays a massive part in this.

Supply and Demand

Another reason why gold prices go up and down in America is because of the supply and demand. It's the most fundamental principle of economics. When demand exceeds supply, gold prices will rise. However, that's not the case when supply exceeds demand. In that case, gold prices drop. Keep in mind that investing in gold is still safe.

Central Bank Instability

Almost all the countries have central banks. So America, too, has its own central bank. In America, the name of the central bank is the Federal Reserve. For the economy of a country, the central bank has a vital role to play, and needless to say that it is responsible for the fluctuations of the gold price. Bank failures make buying gold a safe investment. When the current paper money system faces issues, people flock to gold. This is the moment the value of gold is increased.

Interest Rates

The fluctuation of gold prices also depends on the interest rates. It's another reason why gold prices go up and down. Gold prices tend to decrease if the interest rates increase. What happens is that people sell gold in order to free up funds. That way, other investment opportunities arise. On the other hand, the gold price will increase if the interest rates decrease.

Government Reserves

U.S. Federal Reserve holds both paper and gold currency in reserve. As a matter of fact, America holds most of its reserves in gold. Recently, the country has been buying a lot more gold for reserving. When the central bank begins to buy gold more than they sell, the gold price increases. The reason is that the supply of currency increases and furthermore, gold becomes more scarce.

So these are some of the reasons why gold prices can go up and down. If you want to know the gold prices, you can use the gold calculator.