Upward Pressures on Price of Gold Per Ounce



As many financial experts have been telling us, the price of gold per ounce has been rising in recent months. This predication of these experts has been based on a number of important factors. To begin with, as the economy continues to falter and many of the other types of investment options continue to look doubtful, many people are turning to gold as an asset they can invest in with great trust. Over the course of recent history, gold has been shown not only to retain its value during tough economic times but even to gain in value. This upward pressure on the price of gold per ounce comes even when other assets such as stocks or real estate are falling in price. Such was the case during the high inflation days of the 1970s, when ever increasing prices were resulting in a devaluation of the American dollar. During those years, gold prices rose, providing holders of the precious metal with greatly needed influxes of capital.

The same phenomenon that occurred in the 1970s has been showing itself as applicable today as well. Gold prices have been on the rise in recent years, owing to a flight to quality, as it is often called in the investment markets. This flight to quality occurs when investors return to the purchase of assets that they have great trust in, such as gold. As was stated above, history has shown that gold maintains value no matter what the current economic climate, not only in the 70s but throughout centuries of human history. This long history of gold value retention combined with this flight to quality increases the demand for the metal, which causes prices to rise. Thus, investors with gold holdings have the opportunity to make significant returns on investment.

At the same time that gold has been rising in demand because of the purchases of investors, leading to a higher price of gold per ounce, many industries are increasing their demands on gold stockpiles as well. Because of gold’s unique property as a conductor of electricity, it is often used in the manufacture of high end electronic equipment and in the wiring of very sensitive instruments. The medical field also has been putting gold to new uses as an anti-inflammatory agent and in the practice of dentistry. Thus, as these branches of industry have grown, so has the need for gold, driving prices paid for the metal yet higher.

Event Calendar