The price of gold is primarily determined by four different factors, including demand versus supply, struggling markets, currency devaluation and practical applications. All four factors should be understood before investing in gold.
Demand and supply come into play to determine the price of gold, as it does with other commodities. When demand is high, the price of gold rises. Gold also rises when other markets are struggling, as gold has consistently remained highly valued. Similarly, when another currency loses value, gold is often seen as a secure way to keep assets intact. The price of gold also rises and falls due to its practical uses, such as in electronics.