Why does gold have value?
Gold has always been held in high esteem throughout the majority of known history, and has traditionally always been used as a symbol of wealth and as a type of currency. When you look at gold in a more scientific sense, you begin to see why it has captured the imagination of civilisations since the dawn of humankind: gold is not radioactive, it doesn’t react with other materials, it’s easy to tell it apart from other metals, and it’s easy to work with whilst still holding its strength and integrity. What’s more, gold is a finite resource with just enough to go around – it’s not so rare that hardly anyone can own some, but it’s also not so common that it becomes almost worthless.
At the end of the day however, gold is also a very beautiful substance, and is unlike any other metal which is likely why it captured human imagination in the first place. Copper is perhaps the closest you’ll get to gold in colour, but it will turn green when exposed to moisture in the air for too long. Gold, on the other hand, could be sitting submerge at the bottom of the ocean for hundreds of years, and still have that beautiful yellow shine.
Why does the price of gold fluctuate?
The price of gold fluctuates because its value is determined by the stock market, and this in turn is dependent on many different factors. World events, the economy, natural disasters and political decisions can all impact the price of gold – in fact, gold tends to do very well during times of turmoil, or when the economy is doing badly. This is because gold is a tangible, ‘safe bet’ when certain currencies are losing value due to inflation, recession or other economic trouble.
Currencies as we know them (pounds, dollars, etc.) only have value because we decide they do. These days, most currency is digital; however, gold can be held, weighed, and divided up, which makes it much easier to manage and recognise. In times where currencies are weakened due to instability or an uncertain future for a country’s economy, gold is seen as a safe haven for investors.
Why is the gold price increasing at the moment?
In the last quarter of 2018 and the beginning of 2019, gold has seen an upward turn. Many experts have linked this particular rise in gold value to the weakness of the US dollar, which is under stress in part due to political issues, impending trade difficulties and interest rate rises on the horizon. Of course, the weakness of the pound due to uncertainty surrounding Brexit is also a factor in boosting the appeal of gold.
We know that gold does well on the stock market during times of instability, crisis and uncertainty; whether that’s surrounding the government, the economy, infrastructure, trade, or anything else. With that in mind, it’s easy to see how gold has benefitted from current affairs both in the UK and the US, as there are many unsolved issues and possible outcomes to consider. As the future of these major economies is more uncertain than we are used to, it’s not surprising that investors are flocking to invest in gold at the moment.
How long until gold begins a downward trend?
There is no way to know when gold will start another downward trend, but it’s safe to say that while Brexit is still undefined and a no deal Brexit is a possibility, and while there is still a risk of further US government shutdowns and possible trade issues, uncertainty and weakness in the dollar and the pound my well continue to bolster gold’s value for a short time.
Some analysts are saying that it is unlikely to last, whereas others are more confident about gold’s continuing upward turn. As with all stocks; it’s anyone’s guess. There’s no denying, however, that gold is currently in a stronger position than it has been for some time.
Between August 2018 and February 2019, for example, there has been an 11.8% increase in gold prices per ounce. Of course, this is the general trend and the price of gold may still go down one day and up the next. We saw this most recently when the dollar strengthened after the State of the Union Address on 5th February, which in turn saw gold lose some value. The consensus is that gold is expected to keep going strong despite this recent hiccup, but only time will tell.
We Buy Gold
Here at H&T Pawnbrokers, we are happy to make you a no obligation offer for your gold items. If you have gold jewellery which has broken or that you no longer wear, unwanted gold ornaments, coins or bullion, then why not bring them to us for a valuation? You could be surprised at the value held in these items, particularly while gold is in a strong position on the stock market. Of course, as mentioned above, the set price of gold can change drastically from one day to the next, so be prepared for this.
Whether you’d like to bring your gold items to one of our 180+ UK-wide branches, or send them to us via our safe and insured postal option, you’ll be offered a fair and current price (subject to testing). If you’ve visited in-store, we’ll pay you with cash on the spot and if you’ve opted to post your gold, we’ll send the money straight in to your bank account. Get started here to get a quote for your unwanted gold.