Factors Affecting Gold Price

Seasonality: Prices of gold coins depend on the season. Usually, they are high during November - December and during the spring season. During festivals such as Diwali, Akshaya Tritiya, Ramzan etc., most of the jewelry stores offer sales and discounts. It is the best time to invest in gold as you get high discounts on the price tag.
Bad Economic Climate: Economic crisis will increase the price of gold, while a stabilized situation could steady the price of gold as well. The cost of gold is greatly influenced by other market factors also.
Demand and Supply: With its huge tradition and culture of buying and saving gold, India is responsible for 27% of the demand for gold in the world. Countries such as Brazil and China are entering into the gold market. As the demand for this precious metal increases, its price also increases proportionately.
Inflation: In India price of gold coins are greatly swayed by inflation. Gold is thought to be an inflation hedge. So, when inflation increases more and more, people try to lock their money in gold. This demand for gold in turn increases its price. If the inflation decreases, gold prices will reduce proportionately.
Collector's Coin: If you are into buying mint or bullion coins, then other factors like demand and supply influence its price. The rarer the coin, the higher will be its price tag. If a particular vintage coin is in demand, then its rate will be pretty high. Another factor that influences the price of collector's coins is the supply maintained by the dealer. If the dealer has more coins, then he would sell them for less, while a limited supply could increase the price. Another feature that influences the price is the grade or condition of the coin. Uncirculated coins in mint condition are very rare, therefore costlier than coins in circulation.
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Gold Price Predictions for 2012

It is a known fact that gold continues to be one of the most attractive commodities as far as investment and hedging against inflation is concerned. After the major economic debacle in 2008 people have started losing faith in stocks, shares and mutual funds and they would rather be happy investing in gold. This has indeed resulted in the spurt in gold prices over the least 4 to 5 years.
Hence while making gold price predictions 2012 one has to look at the reasons why gold continues to be a good investment. Before going deep into this matter it would be pertinent to point out here that during 2011 the price of gold has surged by over 22% which perhaps even the best of blue chip companies would find it difficult to match. Going by this performance in 2011 and taking into account other considerations it would be correct to assume that the price of gold will continue to surge quite dramatically even in 2012.
There are quite a few analysts who have in hesitation in stating that the price of gold might even go up to $2,200 or more for an ounce in the next few months. Hence for those who are looking at a good investment and hedge option there is no doubt that gold will continue to be one of the best alternatives.

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Why Gold Prices Are Racing Ahead?

World economies have not been having it good of late. With most Western and European countries just recently recovering from the 2008-2009 recessionary period, current GDPs seem to indicate that they may very well be slipping back into that stage again. Gold, which has been a dependable standard of investment till date, continues to hold fort and is seeing a constantly escalation in price. So much so, that it has superseded the price of platinum. This is not a good sign of things to come.
Investing in any precious metal is based on the underlying fact that it is of some value. There is a lot of sentimental value attached to gold and therefore it has been viewed as a solid investment that can be liquidated at any time. However, in terms of its usage elsewhere, there are other precious that are much more in use, such as that of platinum. Platinum is rarer than gold, yet it has receded in price. Silver, while cheaper than gold is used much more for commercial and industrial purposes, yet it is nowhere near the price of gold. The worry is whether the bubble of gold's price will be able to hold its own.
The reason for this increase in price of gold is simply public fear. Gold is viewed as a safe instrument of investment and has been used by countries as a means of trading for centuries. There is a sort of rapport that has been built over gold. The basic ideology is that if it is shiny and rare, then it is worth something. The price of gold tends to go up when there is instability prevalent among economies. When the value of the US dollar goes down, the price of gold tends to go up and such is the case right now.

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