Gold is a very ideal investment and financial management project, because of its unique financial advantages, it is favored by wealthy people. Gold can fight against inflation, and it can also avoid political turmoil and man-made market manipulation. There are no restrictions on the time and place of trading. Gold has so many advantages, what do you need to know when investing in gold? First of all, it is necessary to know what factors will affect the price of gold?

1. Changes in actual demand for gold (jewelry industry, industry, etc.)

Generally speaking, the development of the global economy determines the total demand for gold. For example, in the field of microelectronics, more and more gold is used as a protective layer. Although the substitutes of gold continue to appear for the sake of the advancement of science and technology, but the demand for gold is still on the rise due to its special metal properties.

2. The need to preserve value

Gold itself has investment value, so when the above factors exist, investors will enter the market, and therefore the price of gold will be driven by the demand side factors.

3. The impact of the U.S. dollar

Mostly, the US dollar index and gold price is often negatively correlated. So when the dollar become strong, the price of gold will fall. On the other hand, the price of gold will rise when the dollar weakens. Therefore, if the Fed raises interest rates, the dollar will strengthen, so the price of gold will fall.

4. The impact of Geopolitics

Whether the political situation is turbulent or not determines the trend of gold price. During wars, gold will become the most popular investment.

In general, the factors that affect the price of gold are not that complicated. What we must always remember is to be ourselves. The market cannot speak, so we have to study hard and look for more advices.