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Monday, September 24th, 2012

What You Should Know About Gold Prices

One of the main questions that people ask before buying gold, is what is the gold price and how it is determined. The reality of the situation is that how much it is actually worth depends on the factors of supply and demand. The term assigned to the gold price is called the spot price. The elements that actually make the price of gold aren’t too hard to understand. Once you learn it will all make sense.

The difference between stocks and other such commodities and gold is that you can actually feel the gold in your hand. Stocks are items that are intangible so it can be difficult to put a price on them. In short, they are more mysterious. Gold is not and this is one thing people love about gold and why the gold price is so much simpler to understand than other investments.

To learn more about gold and gold price, take a look at the Bible. In it you will notice that when things were purchased the currency most often used in coins and these coins were made of either silver or gold. Even thousands of years in the past gold was important. Modern times are when we began to see paper money instead; in large part due to wanting to take these precious metals off the market and out of circulation. So the next question would be, what made gold have such a value that it was actually coveted by the people? There are a few answers to this question that rolled into one will help you to understand gold price and value. For one thing, gold is something that is unsurprisingly scarce. Nature can only put out so much of any one thing and gold has its limits just like anything else. The next factor is that gold is not something can be reproduced by artificial means. Fool’s gold can be made, and pieces of jewelry can be plated in gold. But other than that real gold cannot be made by any means other than nature. The next factor is that gold is divisible and durable. This cannot be said of most other natural elements. The final factor is that gold actually has several uses.

The last factor is likely the most significant. Since gold is not just something that can be used as currency, it stands to reason that it would be more valuable. It is used in medical and dental equipment, jewelry, and many scientific endeavors. The next reason that is most significant is that even though the gold price is high (and fluctuates day by day) is that paper money is simply easier to exchange for goods and services. It is easier to print out a dollar than it is to weigh gold. Now that you are aware of what makes gold such a valuable commodity, all you need to do is learn more about what exactly causes the prices of change on an continual basis. You are now one step closer to a better understanding about  the price of gold!