Just exactly what determines the price of gold?

Inflation, currency devaluations, supply and demand, trading activity, government manipulation, private manipulation?

Is it over priced, underpriced, what?
Why all the manipulation conspiracy websites?


Everyone know of DeBeers diamond cartel, agricultural product subsidies and embargoes, commodity exhange speculation and real connsumers of for base metals, pork bellies, real estate scams and credit crises, oil wars etc

But what about gold?

The short answer is "all of the above"

Supply and demand is the core - bot supply is controlled both by the producers and by previous buyers.

Individuals generally don't have enough in private stocks to grealy influence the market (though there have been exceptions), but large banks and governments certainly do.

If the price gets too high, they can release gold into the market, and they can also hold it out of the market if the price gets too low.

Currencies generally tade against each other, rather than against the price of gold. I don't know off the top of my head which currency is used as the "index" for gold, though I'm sure that someone on this board does know.

Also, gold is commonly used as a hedge against inflation. People and organizations buy gold as the "hardest" of hard currencies when they are afraid that the value of their Dollar (or Yen or Euro) holdings is going to drop.

So, to summarize...

Supply and Demand

Influenced by the witholding or release of stocks, and the emotional state (fear or confidence) of individual buyers.

It actually is a rare commodity so Supply and Demand is very valid.
Also, it is being used as a global trading tool. As the dollar drops, people move to gold etc.

Maybe you're already aware, ticker symbol GLD is a way to buy a piece of a Gold Reserve as a stock.

I purchased silver yesterday during the dip. I'm happy today!

Actually, I do, judging by the size and number of my wife's bauble boxes.

quote:

Originally posted by minalpharetta:
Actually, I do, judging by the size and number of my wife's bauble boxes.

I know the feeling! My wife's tastes become more refined (read "expensive") every year...

Interesting topic indeed i do remember hearing once.I can not remember where that 95%of the worlds gold has already been mined.Anybody know if thats true?I have noticed in America anyway when the dollar is doing bad the price of gold is very high like it is right now.

quote:

Originally posted by SHEEPSHEAD BAY:
Interesting topic indeed i do remember hearing once.I can not remember where that 95%of the worlds gold has already been mined.Anybody know if thats true?I have noticed in America anyway when the dollar is doing bad the price of gold is very high like it is right now.

I think that might be correct if you don't count what is in sea water. And, half of what is left is in South Africa!

Goldman Sachs.. what ever their position is at the time being long or short. Don't fight the power.

Pretty dull. So far my jaw has not dropped even one millimeter.

quote:

Originally posted by QM:
Just exactly what determines the price of gold?

The demand brought on by electronics manufacturing (especially during war-time) heavilly influences the price of gold.