what are the factors which decide the price of gold in the market?

The price of the gold fluctuates on a daily basis. I would like to know what actually causes these fluctuations?

Public Comments

1. Gold is about 10 times the price of oil. I was told this has been a historic relationship.
2. Gold is a commodity.All commodity prices are governed by supply and demand fluctuations.Supply and demand change every day.Whenever supply is more than demand, prices fall and vice versa. Not just that, Gold is treated world over as the safest resort for investment.So whenever stock markets fall, investments are transferred to gold.Sudden demand causes gold prices to go up, like it has just touched 13K/10 g because of recession fears. Africa has a pretty good proportions of world's gold reserve.It is said that lack of proper infrastructure for mining in Africa and ever increasing will keep on pushing gold prices higher and higher.
3. There are basically five major gold markets around the world. These are New York, London, Zürich, Hong Kong and Sydney. London Bullion Market is sometimes confused with the London Metal Exchange which is quite different. Only gold is traded at the London Bullion Market while other metals, other than gold, are traded at the London Metal Exchange. So gold is considered as a metal by itself in these terms. The price of gold is actually determined twice a day in London. Here a group of bankers get together and 'fix' the price of gold or in other words, decide what the price of gold is going to be at those particular moments when they decide the price. Of course the price then changes by the hour and moves up and down depending on various influences and perceptions of the value of gold. The reason for the fix is more to add stability and as a stable price twice a day for the banks to work on. A sort of guidepost for the day you might say. The price fix is actually determined in Pounds Stirling and is then converted, by various markets, into the currency of their country. Commonly, around the world, the price of gold is perceived in US dollars and Euros. Each market have their own operating times depending on the time zones and this means that gold can be traded more or less around the clock. There is much trading between the markets as a result. The value and price of gold varies depending on various factors. Some of these factors are, The value of various currencies, particularly the US dollar. The price of other commodities, The oil price, the economic situations and changes in those situations around the world. World events, such as wars and even dramatic weather influences, such as earthquakes, tidal waves etc. The biggest influence of course is the perception of the value of gold as against their currency. There are hundreds of analysis on a daily basis busy writing on what they think the gold price is going to do, go up or down or remain steady. In the final analysis no one can predict with 100 percent certainty if the value of gold will go up or down. In the long term, one can see historically that gold has always gone up. Provided there is inflation, currency manipulation, economic upturns and downturns it would be safe to say that, in the long term, gold will continue the trend it has had over the past 100 years. Hong Kong is the center of gold trading for the Far East and the Southeastern Asia region. The Hong Kong Dollar is used here. It can be confusing to decide what to do, either buy gold or sell gold or just keep what one has.
4. Gold in the most common metal used globally either to use or to store. Other than usual "demand and supply" aspect, price of this metal is also determined by "perception" towards it.