Gold prices fluctuate often, and the reasons why can be complex and far-reaching. Many attitudes, actions, and world-events can factor into whether the price of gold increases or decreases – and 2016 has been chock full of these types of influences. Let’s recap some of the biggest events that affected gold prices this year.
The US Presidential Elections
A changing of the guard for a world superpower creates uncertainty among global investors. As the transition of power heads underway, it’s reasonable to assume that gold prices will fluctuate.
The British EU Referendum already made a huge impact on gold prices earlier this year. But, Britain won’t begin its formal withdrawal from the EU until March 2017, continuing through to March 2019. The full economic impact of this move still has yet to be determined, so it could continue to affect gold prices for a long time.
Because of the global economic impact behind the US dollar, its value directly correlates with gold’s value. When the dollar is weak, gold demand rises and the price increases (see circa 2008), and vice versa. Low interest rates in the US, UK, and Asia have made currency-based investments, like bonds and treasuries, less enticing to investors – increasing demand for gold.
The year isn’t over yet, so we may see even more big changes to precious metal prices in the near future. If you want to keep a close eye on these price fluctuations, download our app to view historical trends and set price alerts.