If you’re looking to get cash for gold in Atlanta, you probably are perplexed at how the price of gold can fluctuate. Seemingly, for little or no reason, gold can go up and then drop just as suddenly. Why is not so mysterious, but if you do not routinely sell gold in Atlanta, it can seem confusing. Here is a brief tutorial on what influences the price of gold.
Economic and Political Worry
Gold is considered a “hedge” investment. That means that when the stock market is fluctuating, the country is experiencing political upheaval, or the economy is in a downward trend, gold becomes that investment that is “rock solid,” literally, and in terms of the dependability of its value. When any of those three things happen, gold becomes a hot commodity in terms of people purchasing it for investment reasons. The thinking is that there will always be a market for gold, no matter what else is going on.
The Federal Reserve
The Fed plays an incredibly large role in determining the price of gold. It sets interest rates and because they have generally been low for over 20 years now, the concept of “opportunity cost” comes into play. Opportunity cost is giving up a secure investment return for the promise of bigger gains in another less secure investment. The low-interest rates have made bonds and CDs less attractive because they yield so little a return on the initial investment. That reality can prompt some people to invest in gold over bonds or CDs because of the potential of the price of gold increasing enough to exceed the very low yields of either of the other two investment instruments.
Another impact the Fed has is when they meet to discuss the economy. We use interest rates to help control economic growth as well as to manage inflation. When the Federal Open Market Committee meets to discuss the economy, if it’s suggested interest rates will hold steady, the opportunity cost of gold becomes attractive to investors. That increases the price of gold because more people are buying it up.
Supply and Demand
That brings us to how supply and demand and how that affects vendors who buy gold in Atlanta and the prices they want to get for an ounce of gold. Gold is abundant, but the quantity on the market is finite. When demand for a constrained supply of any good or service is high, the price of that good or service will increase. If demand is low, the price will decrease. When gold demand is high, its price will increase on the open market and the opposite is true as well, which affects the prices gold buyers in Atlanta will pay for gold.
If you’re considering getting cash for gold in Atlanta, you should track the market price for an ounce of gold and pay attention to what could influence that price. Paying attention to these markers can ensure you maximize the value of your gold.