If you are a gold aficionado, then gold prices in Asia and the global market should pique your interest. According to Bloomberg, gold prices rose to its highest starting in early July. This, as investors await new data to be released regarding the United States economic state as well as the potential velocity of interest rate hikes.
When bullion prices increased to 2.2% last week, it put a halt to what would have been its fourth monthly decline. It continued to rise on Monday as the US is expected to release major employment data this week.
Whether you simply have a sheer fascination for gold or look to it as a safe haven investment, the answers to the most frequently asked questions about gold prices in Asia and worldwide should help you make informed decisions about this liquid asset, which also happens to be one of the world’s most traded financial assets.
What are the Factors That Influence Gold Prices?
Gold prices in Asia and around the world are influenced by several factors. These are inflation, the US dollar, war or natural disasters, domestic interest rates, and economics.
Is gold up or down? Inflation plays a major role in this. When inflation happens, the equivalent currency depreciates. This means that metal and other commodities will now become more valuable. However, historically, gold rarely depreciate value-wise, thus it’s commonly utilized as a tool to limit inflation risk.
The US Dollar
Because gold is priced in US dollars, once the appreciates, the price of gold will decrease correspondingly. For example, $100 can buy 100 Oz of gold. But because USD appreciation is expected, you can now purchase 120 Oz of gold for the same price tomorrow. Hence, gold’s attractiveness decreases today.
War Or Natural Disasters
Whenever wars or natural disasters occur, people sell assets, which include the local currency. Afterward, they will go ahead and buy safe-haven investments. And because funds are flowing into these safe-haven assets, the price of gold will appreciate as well.
Domestic Interest Rates
Let’s take the US dollar as an example. When the government increases interest rate, you also earn interest, therefore you invest in USD. Subsequently, gold being a commodity, won’t generate interest. This is why the attractiveness of gold decreases when the interest rate increases. So if you’re made to choose between USD and gold investment, and the latter will give you 1% interest, while the former gives you none, your final decision would be a no-brainer, wouldn’t it?
Every time a country experiences a recession, people tend to lose confidence in the local currency. They will obviously search for low-risk assets, thereby increasing the price of gold.
In Which Country the Gold is Cheapest?
Not only the country but more specifically, in which city the gold is cheapest? This happens to be Delhi in India, where 22 karat gold would cost Rs. 49,200 or $618.49. Here are other places you should buy cheap gold from the next time you come and visit.
For those who wish to buy 24-karat gold, you can have it at 4,571.50 Hong Kong dollars per 10gms or $582.34. Meanwhile, 22-karat gold is at HK$4,190.50 per 10gms $533.80.
Purchasing 10gms of 24-karat gold in this country would cost you 2,184.30 Riyal or $581.22. On the other hand, for 22-karat gold you will have to pay 2,002.30 Riyal per 10gms or $532.79.
Dubai is another great place to buy gold. As a matter of fact, its gold prices are even lower than some of the places that sell gold in India. 24-karat gold is 2,195.00 Dirham per 10gms or $597.59. Meanwhile, the 22-karat gold is still at 2,062.50 per 10gms or $561.51.
Finally, don’t forget to purchase gold before you head out of Switzerland. 10gms of 24-karat gold is only $607.41 or 583.20 Swiss Francs. While the 22-karat of the same weight will only cost you $556.89 or 534.70 Swiss Francs.
What is the Best Gold Jewelry to Buy?
Just because 24K is 100% pure gold, this doesn’t mean that it is the best. Why? Because pure gold jewelry is easily bent and scratched, thus it cannot be worn on a daily basis. However, if it’s for a very special occasion, like your wedding anniversary or a red-carpet event, then, by all means, go for it!
So, given the current gold prices in Asia, what is the best choice for purchase? 18K is recommended since this is composed of 75% gold/25% alloyed metals. It has a higher gold content of 18K, which is made of stronger material, and is more durable. So if you’re looking for beauty and functionality, 18K is the best choice.