The Ultimate Guide To Predicting Gold Prices

The Ultimate Guide To Predicting Gold Prices
The Siliconreview
29 June, 2021

When it comes to predicting the price of gold, it’s important to learn from history. Using past data and data from a closer period allows you to weigh the factors for prices, and help you make informed decisions.

There are experts out there right now that are analysing trends going forward, to help investors and predictors get correct information. This guide will allow you to learn about the importance of gold, to help you predict the prices effectively.

Why Gold Prices Matter – The Effect They Can Have

The price of gold has always been an important part in human culture. Many nations spent years raging wars trying to get as much of the precious metal as they could. In fact, it was so valuable that anyone who hoarded it, was considered wealthier than royalty.

You may be familiar with the story of Mansa Musa, who remains to this day the richest ever person in the world. Forgot Bill Gates, it was all about the 14th century African king whose wealth was simply unimaginable. The Mali king saw his rule flourish due to ample natural resources, at a time when European kingdoms were struggling from various wars.

The king once left Mali to set on a pilgrimage, travelling an estimated 4000 miles with tens of thousands of soldiers and his wealthy caravan. This caravan arrived in Cairo, Egypt, where after a meeting with the sultan, Musa was offered lodging and promised to be generous to the public, littering the streets with gold and foreign goods, such as silk.

Whilst this was appreciated at the time by the locals, it actually crashed the economy, making gold and other metals worth so much less. It took Cairo twelve whole years to recover from this, long after his short visit. There’s a lesson on golds worth here, and why the supply and demand are important.

Previous Trends In History

You can view historical charts on gold prices over a 100 year period, in order to see how prices have varied. For example, as of June 2021, the price is $1,892 per ounce. Compare that to 1970 where it cost $246, and you can see the difference. There will always be booms and drops in the price of gold, but it’s important to understand why.

For example, the price of gold hasn’t dipped below $1,000 an ounce since 2008, where you’ll remember there was the global economic crisis which led to the banks having to be bailed out. Since the recovery, the price of gold has stagnated somewhat, but history shows anything can change.

The biggest reason for a change in gold price, is when it comes to supply and demand. The more demand there is for gold, the more it will cost to buy. If supply was to outstrip demand, then that would mean the price decreases.

Previously, the only goal of gold was for asset holding or jewellery, even art, but now it is an essential component of many modern technologies.

Five Year Forecast

Experts can look at data and work out what factors will have the biggest influence on gold prices, such as the current value of money post COVID-19. As such, if the economy is in a state where it has to offer lower interest rates, then you can probably imagine that the price of gold will be higher, due to ongoing efforts to keep the economy afloat.

It’s fair to say that if the major nations on the planet have to pay out more than they usually would to keep infrastructure in place, then it’s likely gold will cost more to purchase. It all depends on how the economy settles post pandemic. We’ve seen the furlough scheme in the UK pay out businesses to keep them afloat, and stimulus packages handed out to US citizens to help them afford bills.

The next five years will be a challenge for the economy, and experts are putting their heads together trying to get ahead with changing trends, and be able to make money by planning ahead. You can also get in on this.

Testing Your Skills

Once you feel as if you’ve learned more about gold, the pricing trends and what you can use it for, then you will now be in a position where you can try your hand at predicting the price. There are a few ways you can do this, you can use the stock market and other markets to watch the price and write down what you think, to come back to after a few weeks to see if you were right.

What you could do, which is a more fun way to do so and more practical, is to use a prediction site where you can actually earn monetary rewards for correct predictions. You can go to Pynk to discuss gold predictions, where a community will welcome you with asset classes, and give you the keys to consistent success.

This site holds a range of resources where you can learn about predicting gold prices, as well as learn about new ethical and sustainable investment habits. They utilise the latest technology to do this, which is centred around people.

It won’t take you too long to get to grips with the gold market, and understand the trends to make your own predictions. Consider speaking to gold experts as well as conducting your own research, in order to put yourself in the best position you possibly can.

Practical Uses Of Gold

There are actually many different practical uses when it comes to gold. You will most likely be familiar with its application with jewellery, through necklaces, rings and bracelets. Gold is universally accepted as one of the best materials to use for jewellery, as it does not tarnish, rust or corrode.

Of course, pure gold wouldn’t be applicable to wear as an accessory, so gold makers alloy it with a mixture of other metals, in order to make the gold harder. That’s why you’ll see gold percentages on jewellery listings, in order to see how much gold went into the production.

As gold that is in its pure form, is more a deep yellow colour, but when mixed with other metals such as silver or copper etc, you’ll be able to create any colour. Of course, the yellowish look is still what most people go for, as they think it looks better and can be shown off better than any other colour, even if the other colours have more gold inside.

It’s not just jewellery that is used for gold, but electronics that we all use actually have some instance of gold. You see, gold is commonly used on connectors and contacts, due to it having a high corrosion resistance rating. This means that it can conduct higher amounts of electricity without burning out, and if utilised and alloyed with traces of nickel or cobalt, will actually have good wear resistance.

Locations Of Gold

South Africa held one of the largest deposits of gold found anywhere when a deposit was discovered in 1988. In more modern times, the current largest location of gold is found in Alaska, where almost 71 million ounces of gold currently sits.

Otherwise, in general, Australia and Russia actually hold the largest share of gold reserves, where they actually account for almost 20,000 tonnes all together.