What Factors Affect the Price of Gold?

Buying and selling gold is popular with both investors and individuals hoping to make a little cash. Since gold is easily recyclable and reusable, even scrap gold, such as broken jewelry and used gold dental crowns, can have value. But the price of gold fluctuates due to a number of factors.

Supply and Demand

Supply and demand are common economic factors that influence prices, and the value of gold is no exception. While the demand for consumer gold remains at a fairly consistent growth, demand by investors can swing high and low, depending on economic and political conditions. When demand rises, so does the price of gold.

As for supply, gold is not a rare metal, but it is difficult, hazardous, and expensive to mine. Recycled gold, therefore, remains valuable. Gold is versatile and malleable and can easily be refashioned into jewelry, coins, or other products.

Interest Rates

Interest rates are tied to economic activity, both on a large and small scale. Interest rates often reflect the general economic health of a nation and the strength of the currency. Factors such as the employment rate, cost of living, and growth rates are indicators of the economy.

For most places, interest rates are raised or lowered by a central financial institution such as the U.S. Federal Reserve. Generally, gold prices tend to go up when interest rates go down, and vice versa. But it’s sometimes difficult to predict when or how much the increase or decrease will be.


Since the price of gold is inversely related to interest rates and other economic variables, many investors view gold as a hedge against inflation. When returns on other investments slow or reverse, the value of gold generally remains more stable or appreciates.

Since gold doesn’t deteriorate, rust, or lose integrity, any gold bought years ago will still have the same value as recently-bought gold. However, gold in the form of precious jewelry or coins may have additional value as collectibles.

Just like stocks and other investments, gold prices can rise or fall with little or no notice. Nevertheless, gold remains a valuable asset. Even with scrap gold, such as gold crowns or fillings, it makes sense to recycle it and claim the cash.

Do you have used gold crowns or other dental scrap to sell? Click here to see how Crown Buyers can help.

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