Gold has been a staple in many countries’ economies for over 1,000 years. It is considered a store of value—an asset that maintains value without depreciating—because people and societies continuously fall back on it during tough economic times. If you’re considering purchasing gold, use this guide to learn when the prices will rise and fall, so you know when to buy or sell. 

What Influences Gold Prices?

1. Interest Rates

When interest rates on near-guaranteed interest-bearing investments, like bonds and CDs, remain low, this can result in real money losses for investors. Riskier investments like gold then become more attractive despite having a zero percent interest yield. Consequently, the price during these times tends to increase. When interest rates start to rise, investors are more likely to sell their gold—putting more back into the market and decreasing its price.

2. Federal Reserve Commentary

Every six weeks, the Federal Open Market Committee holds meetings to discuss the U.S. economy and monetary policy. If any decisions or declarations made from these meetings implies a change in interest rates, gold prices will often decrease or increase in accordance with this news.

3. Inflation

While it’s not as significant of a factor as the other two items mentioned above, inflation is a sign of a growing economy, and increasing levels do tend to push gold prices higher. During these times, the Federal Reserve seeks to expand the money supply, which dilutes the value of existing monetary notes. Consequently, store of value assets become more expensive.

Whether you’re looking to buy, sell, or have your gold appraised, head to Hawaiian Islands Stamp & Coin in Honolulu. For nearly 50 years, this family-owned business has appraised and authenticated coins, stamps, paper money, and old Hawaiian valuables for collectors, banks, trusts, attorneys, and law enforcement agencies. Visit their website to find out what their clients have to say about them, or call (808) 531-6251 to set up an appraisal for your precious metals and coins.