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Why has the gold price gone up so much?

Published by Roland Uriko in category Economy on 16.03.2022
Gold price (XAU-GBP)
GBP/oz1 480,33
  
+ GBP1,13
Silver price (XAG-GBP)
GBP/oz17,52
  
+ GBP0,26

It is unlikely that an observant eye has missed the significant rise in gold price recently. Why is gold breaking historical records and what exactly does the price depend on?

How Much Does Gold Cost?
The stock market is currently experiencing very tense times, which presents a challenge to beginners, while also challenging experienced investors. However, as the stock market is currently fluctuating, sometimes even in percentual double-digits, and the price may move up and down unexpectedly, the question may arise as to why the price of gold is moving upwards. All the more as many stocks have plunged directly into free fall.

But how much does gold still cost? To get the most relevant information, you should take a look at the world market price chart, where the current price of gold and its movement can be seen in real-time.

The crisis will not arrive dancing
There is a simple reason that the price of gold is once again reaching new heights: while until a few years ago most of humanity felt that we were living in a relatively stable and conflict-free world, recent events have cast doubt on many.

As many changes are affecting the global economy and there are likely to be more in the near future, possible alternatives to existing and hitherto well-functioning solutions are being sought to act as a parachute in a crisis.

Gold has always played and will continue to play this role. As inflation is the root cause of all financial crises, it forces prudent investors to invest their assets in gold and thus secure their portfolios. Demand for gold as a secure asset is also growing at a time of major shifts in global economic, military and political power relations.

Unfortunately, the current situation is no exception: the price of gold gained momentum at the beginning of the corona pandemic, and the events of recent weeks have once again raised the price, while many other asset classes tend to fall in value. The rapid price cuts of recent weeks have also been followed by sharp adjustments, but the general trend is on the rise.

The value of gold increases when everything else falls
One very important aspect of why gold is a refuge for investors in crises is also a feature of this asset class: the rule of thumb is that when, for example, shares and real estate fall in value, gold behaves in the opposite direction and becomes more expensive.

As gold has little to do with other asset classes, its value is never directly affected by the statement of any technology company manager on Twitter or the quarterly financial results of any of the companies. Gold is very weakly linked to other asset classes and global economic cycles, helping the smart investor to diversify its portfolio, protecting the investor from major losses or unexpected free falls.

Gold price (XAU-GBP)
GBP/oz1 480,33
  
+ GBP1,13
Silver price (XAG-GBP)
GBP/oz17,52
  
+ GBP0,26

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