There are multiple factors that influence prices. As with most commodities (and perhaps most especially, those within the precious metal market), the price is mainly driven from the economic module of supply and demand, as well as speculation. However, unlike many other commodities, the saving and disposal of this metal plays a much larger role in affecting its price that just its consumption. For instance, most of the gold ever mined still exists in some accessible form (such as jewelry and bullion bars and coins) and holds little value over its net weight (or “fine weight” when referring to precious metals). Thusly, a majority of the owned gold in the world is potentially able to enter back into the market at current prices; and although there are estimates as to the total amount of the metal (in weighted tons) that has ever been mined out of the earth, plenty of it is not accounted for within circulation.
When it comes to determining the ounce price, many factors come into play, but the best place to determine gold’s most current spot price is by the World Gold Council. Concurrent with any market’s fluctuations, the true price changes minute-to-minute, but is updated every 10 minutes, and is largely based on how much of the metal the World Gold Council is willing to sell (hence the supply and demand module). However, given the huge quantity of the metal that is stored above-ground as compared to the annual production rate, the price is mainly affected by changes in demand for it rather than changes in production, or supply. Central banking systems, hedging against financial stress, industrial demand, second-hand recycling, short selling, and national emergencies are some of the major factors contributing to the momentary spot price.
Gold’s value can also be determined and/or retained in the form of stocks, trusts, certificates, and ETFs. An ETF (exchange-traded fund) is an investment fund traded on stock exchanges, and are attractive as per their (generally) low costs, tax efficiency, and stock-like features. Otherwise, stocks, trusts and certificates are all great, safe investments when it comes to owning non-physical gold.