Factors which influence gold prices.
A) Weakness in the US dollar contributes to upward pressure in gold prices. So watch out for how the dollar is performing. A weak dollar forces people/brokers/banks to buy and use gold as an exchange mechanism instead of the dollar.
B) Rising equity market also forces some investors to shift their funds from gold to equity market for quick gains leading to reduced gold demand and in turn to lesser prices. So if the stock market is going up you have the double benefit of gold price coming down too.
C) High crude oil prices also impacts the price of gold. Higher the crude oil prices, higher the price of gold which is because investors buy gold as a hedge against inflation, and when oil prices go to lifetime highs people turn to gold and this higher demand drives up the price of gold.
D) Locally in India, the marriage and Diwali season see a very high demand for gold and this in turn rises the price of gold (has to since 60% of the world produce of gold is sold in India)
Gold prices are usually always on the upward trend.But there are few lean periods in which the prices are usually low compared to other months, they are July/August. So next time you want to buy gold look to the factors above and decide accordingly.
