The Supply and Demand Trends for Gold

The scarcity of gold has always influenced the demand curve for the commodity in the global market. The demand is currently much higher as compared to previous years, with most traders seeking the commodity in the form of gold coins and gold bars as well as in electronics. It is actually a form of world currency in which most people take pride.

It is estimated that there are 165,000 metric tons of gold in the world market with China and India being some of the world’s largest gold buyers as they dedicate the precious metal to jewelry and electronics. The global demand for gold is controlled by different forces, among them central bank reserves and individual gold coin investors as well as the jewelry industry and other technological fields.

These buyers are affected by different market factors which in turn affect the demand and supply curves of gold, making it even more valuable. The fact that gold remains a global trading asset has made it stronger as compared to other commodities in the market. The buying and trading of gold is allowed across boundaries, an occurrence that is not common when it comes to other forms of assets and commodities.

The price trends of gold are compared in relation to the different currencies that are performing well in the markets globally. Therefore the price of gold does not rely only on the US dollar, although most people may tend to think so. The investment trends are another major aspect affecting the demand and supply behavior of gold. Investments come in the form of gold options, gold futures as well as ETF’s and are believed to have a great impact on the supply and demand curve, mostly for gold coins and gold bars.

The macroeconomic factors also determine the supply and demand of this precious commodity, which has a tendency to affect gold prices. This is the same case with the gold market trends which cause the increase or decrease of gold prices. Over recent years, gold prices have proven to increase even with global economic factors showing a downturn.

The value and demand for gold is expected to continue to increase as more and more investors and interested institutions pursue this precious metal. The gold market will always have willing sellers and willing buyers regardless of the economic factors which affect the demand and supply of the precious metal.