The price of gold fluctuates based on a combination of supply, demand and buyer perceptions and behavior. However, unlike paper money, the supply of gold doesn't change much over time, so its value is relatively constant. Price discovery is crucial for any market. Not only does gold have a spot price, but it also has the price of LBMA gold, as well as several regional prices.
The LBMA gold price is used as an important reference point throughout the gold market, while other regional gold prices are important for local markets. Some forces affect the supply of gold in the broader market, and gold is a global market for commodities, such as oil or coffee. Research shows that gold prices don't correlate well with inflation, so when inflation rises, the price of gold won't necessarily skyrocket. The economy is collapsing and investors are turning to gold, especially in the form of gold funds, gold IRAs or exchange-traded funds, commonly known as gold ETFs.
Gold also tends to move in the opposite direction of the stock market, so investing in gold can help diversify your portfolio. In addition to central banks, exchange-traded funds (ETFs), such as SPDR Gold Shares (GLD) and iShares Gold Trust (IAU), which allow investors to buy gold without buying mining stocks, are now the main buyers and sellers of gold. Gold, which has captivated the world for centuries, is often revered as a safe haven for investment and retirement portfolios, especially in the form of a gold IRA. Despite the fact that countries such as India and China consider gold as a store of value, people who buy it do not trade it regularly (few pay for a washing machine by handing over a gold bracelet).
The smaller amount of gold available for mining increases the price of gold production, which in turn raises the price of gold itself.