Factors that are affecting the rise in Gold Price.
                     Factors that are affecting 
the rise in Gold Price
Introduction
• Investing in gold is worthwhile because it is an inflation-beating currency. 
Over time, the return on gold investment has remained in step with the 
rate of inflation. 
• Security, liquidity, and returns are the three factors that risk-averse 
investors search for before making any investment. In the coming slides 
the factors affecting gold price rise has been discussed.
Source: Money Control
1. Monetary Policy
• Probably the greatest impact on gold prices is monetary policy, 
which is regulated by the Federal Reserve. Lower interest rates 
in the US reduces the opportunity cost of owning non-yielding 
bullion and weigh on the dollar, making gold cheaper for 
investors owning other currencies. 
• The US dollar strengthened as, for the first time since 
November 2016, 10-year US yields fell below 2 percent as 
expectations rise that major central banks will ease policy.
Source: Business 360
2. Safe Investment
• Investing in gold is worthwhile because it is an inflation-beating 
currency. Over time, the return on gold investment has 
remained in step with the rate of inflation. 
• Security, liquidity, and returns are the three factors that risk-
averse investors search for before making any investment. In 
the coming slides, will dis
Source: Money Crashers
3. Economic Data
• Another driver of gold prices is U.S economic evidence. 
Economic data, such as the employment reports, wage data, 
manufacturing data, and broader-based data such as GDP 
growth, influence the Federal Reserve's monetary policy 
decisions, which can in effect affect gold prices. 
Source: HEC
4. Supply and Demand
• According to the World Gold Council, gold demand during the 
first-half of 2016 grew 15 percent to 2,335 tons, with 
investment demand surging 16 percent to its highest levels 
since 2009. 
• However, gold supply only increased by 1 percent during the 
first-half of 2016, which reflects the slowest pace of first-half 
supply growth since 2008. Rising demand and limited supply 
has been a factor gold prices have gone higher this year.
Source: Money Control
5. Inflation Rate
• A fifth element that can affect gold prices is inflation, or the 
rising price of goods and services. 
• Although far from a guarantee, rising or higher rates of inflation 
appears to drive gold prices higher, whereas lower levels of 
inflation or deflation weigh on gold.
Source: ET
6. Gold ETF
• The biggest gold Fund, the SPDR Gold Shares Fund, purchases 
or sells actual bullion based on demand from investors. When 
investment appetite for gold increases, the price may be 
influenced by the buying and selling operation of ETFs. 
• Cash inflows for gold ETFs have hiked in 2016, causing the 
purchasing capacity of ETFs to increase. This purchasing 
activity is likely having a positive impact on the price of gold.
Source: RupeeIQ
7. Weak Global Forecast
• Weak global growth forecast in the midst of developing 
exchange war strains likewise fed speculators towards the 
yellow metal. 
• Gold has been exchanging on a positive note throughout the 
previous a month on developing international concerns and 
frail financial discharges from the US and China that lifted its 
place of refuge offer.
Source: FX Empire
8. Central Bank
• Gold prices are expected to rise in the coming quarters. It will 
continue continue to maintain a positive bias targeting $1435-
1440 on the COMEX, while domestic gold prices could rally 
towards ₹34,050 followed by 34,400.
Source: Pixabay
9. Geopolitical Factors
• Gold typically does well during geopolitical instability and the 
current crisis over Korea's nuclear capabilities has improved the 
prospects of the yellow metal. 
• Crises such as Trade wars between US-China, which have a 
negative effect on prices of most asset classes, have a positive 
impact on gold prices as the demand for gold goes up as a safe 
haven for parking funds.
Source: Pixabay
10. Good Monsoon
• Rural demand for gold performs an critical function in the 
ordinary demand in the country which depends broadly 
speaking on monsoons. India yearly consumes 800-850 tones 
of gold and rural India accounts for almost 60% of the 
consumption. 
• Subsequently, monsoon in India performs a massive part in 
gold consumption. If the crop yield is right, then farmers buy 
gold from their profits to create property.
Source: Outlook India