While the beginning of the COVID-19 pandemic caused a dip in gold prices, they had already recovered by July 2020. In fact, gold bullion is known for being relatively stable in terms of market value, which is why it makes such a solid investment. Still, it is important to learn about the factors that can influence gold prices, so you can figure out the best time to buy. Use this guide to learn more.

3 Factors That Influence the Price of Gold  

1. Central Bank Reserves

Different countries have their own reserves, or central banks, which strive to safeguard national wealth and monitor inflation. For example, there is a Bank of England, a Bank of Japan, and the U.S. Federal Reserve. When these banks trade paper currency for gold to stabilize and diversify their reserves, the market price of gold will rise.

2. Gold Usage

Aside from coins and bars, gold is used to make a lot of goods throughout the world. One of the most popular applications is jewelry making, such as for rings, bracelets, and watches. The more gold jewelry that people buy, the less there is floating around the market, which can make the price of gold rise. If more people are selling their jewelry, the price may lower. Gold is also used to make medical tools and certain electronics, and the purchase of these items can further affect the metal’s price.

3. The State of the Economy

In addition to general supply and demand, the price of this precious metal can be greatly influenced by the economic well-being of the country. Since gold bullion is more stable in value than stocks, bonds, and other investments, many investors stock up on it when they sense a downturn in the economy. When the economy is on the rise, they abandon this “safe haven” investment for more volatile options. Therefore, gold prices tend to rise when economic prospects are bleak and fall when the market is more hospitable.

Whether you are interested in buying or trading in gold bullion, you can seek guidance from the experts at Coins Plus of Cincinnati, OH. Their staff is enthusiastic about the power of precious metals, which is why they help customers build their collection of gold bars and coins. They can also appraise your coin collections, antiques, and other prized possessions. For more insight into their skill set, visit the website, or call (513) 621-1996 to make an appointment.