Gold always had a prominent place in the market.Gold is one of most important investment options for the American investors .This is also a very viable investment option for the investors all over the world. Americans rush to buy gold when gold prices in USA decrease for some reason while business is slow when there is a sudden hike.
Looking to purchase some gold? You might want to wait until the gold prices in USA go down. Currently the gold rate is $1,341 per ounce. Gold rates in the US have been fluctuating quite a bit in last few months. There hasn’t been a consistent month from March to August 2016. There was a sharp decline in the end of May, but it has been on the rise in past six months. Here are few factors that caused fluctuations in gold prices in USA.
Gold is considered a safety option so gold prices in USA tend to fluctuate whenever there’s a threat of war or atmosphere or insecurity in the country or even the world at times. An election turning violent, cold war tactics, neighboring tensions, etc all contribute to a hike in gold prices in USA. On 23 June 2016, Brexit resulted in gold prices to rise up globally. Gold prices in USA rose from $1256.55 per ounce on 23 June 2016 to $1322.78 per ounce on 30 June 2016. Sometimes the opposite occurs if a political maneuver brings assurance to the people.
Currency devaluation & inflation
Gold prices in USA increase when the US Dollar drops in value or rises up.The gold prices fell in May when American dollar showed some improvement. People love the security that owning gold brings because it may be bought when gold prices in USA are low. That doesn’t necessarily mean that the US Dollar is high or low at that time. In fact, the usual trend is that the gold prices in USA increase when value of US Dollar improves.
Interest on debts
Everyone dreads paying up interest on loans. There is normally a decline in the gold prices in USA when interest rates increase because people are left with less options and savings. So, Americans tend to sell their gold for cash so that they may be able to use it after expensive interest rates have depleted their income. Right now, the interest rate FED (base rate) is 0.500 % and has remained consistent since the last change in mid-December last year. The interest rate doubled from 0.250 % at that time so from late October to mid-December last year the gold rate in US fell from $1166.90 per ounce to $1072.21 per ounce.
Encouraging low interest
According to the set pattern of gold prices in USA, lower interest rates allow Americans to buy more gold as they have cash to spare for such expensive. Banks accomplish this by raising money supply and offering more incentives for loans. People see this as a good chance to apply for bank loans with attractive interest rates.
Keep in mind the reasons that affect gold prices in America so the next time you purchase gold, you will save lost of dollars by good planning according to market trends.