Gold often serves as a hedge against inflation, as its value tends to rise during periods of rising prices. Investors turn to gold to preserve their purchasing power in the face of currency devaluation and inflationary pressures.
Changes in interest rates, set by central banks, can impact gold rates. Low interest rates reduce the opportunity cost of holding gold, making it more attractive to investors seeking alternative investments with higher potential returns. Geopolitical events, such as conflicts, trade disputes, and political instability, can trigger uncertainty and volatility in financial markets.
Gold is often perceived as a safe-haven asset during times of geopolitical turmoil, attracting investors seeking stability and wealth preservation. Changes in gold production levels, mining output, and exploration activities can impact the supply of gold in the market. Factors such as mining regulations, labor disputes, and environmental concerns may affect production and influence prices.