What moves gold markets?
Throughout the ages mankind has set out on risky adventures in the pursuit of gold. What moves the price of gold in present times? There are of course many factors but we will cover some of the major ones that affect the price of gold.
Economic Conditions
Economic Expansion → Higher demand for goods and jewelry → Higher gold prices
Economic Contraction → Lower demand for goods and jewelry → Lower gold prices
*These are based on trends according to general historical patterns and are no guarantee of what will happen in the future as there are many defferent correlations.
Inflation
Higher prices of goods and services (inflation) → Higher gold prices
Lower prices of goods and services (deflation) → Lower gold prices
*Please note there have been cases in history where gold prices have risen in a deflationary environment. These are based on trends according to general historical patterns and no guarantee of what will happen in the future as there are many defferent correlations.
Currency Rates
Weak yen → Higher prices of yen priced international gold
Strong yen → Lower prices of yen priced international gold
International Events
International current events such as political unrest, natural disasters and other emergencies, central bank actions as well as gold mine production issues around the world all affect the price of gold either directly or indirectly.
Gold Price Conversion Formula
The yen based price of 1 gram of gold can be easily calculated based on the 1 troy ounce $ spot price in New York or London and currency rates.
$ Spot Price (1 oz) ÷31.1035 (to gram) x ¥/$ rate = 1 gram price in Tokyo
TOCOM Gold Market
As you can see many factors affect the price of gold around the world, putting all of these factors together makes for an exciting and dynamic market. On TOCOM, Japan's largest commodity exchange, the gold contract is the most popular for both professional and individual traders alike. There is also a gold-mini contract that is 1/10th the size of the regular contract.
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