New York Spot Gold set a record high at $1,308.70 per ounce during noon trading, while the value of the dollar weakened and investors were nonplussed by current consumer confidence. Meanwhile, Silver climbed 19 cents to $21.65 per ounce and platinum, $1,634 an ounce.
How come Gold keep setting Record Highs?
Changes in the price of commodities such as gold can reflect a change in the value of the US Dollar, or it can reflect changes in supply and demand for gold.It is almost always the case that a part of the change in the price of gold is due to the change in the value of the US Dollar. Often times this mean that the change of the price of gold as a whole is due to the mathematical recalculation of the value of the US Dollar. The stronger the US Dollar, the fewer dollars it takes to buy any commodity priced in USD; the weaker the US Dollar, the more dollars it takes to buy that same commodity. This is part of the reason the value of gold seems to fluctuate.
Another reason for the changes in the value of gold is simply increases in the supply or demand. If the price is higher in major currencies in addition to the US Dollar (Euros, Japanese Yen, Pounds, etc), then that indicates that the demand for gold has increased, and consequently increased in value. Also, if the value of gold is higher in US Dollars yet cheaper at every other currencies, then it will be safe to assume that the value of the US Dollar has weakened, and gold has lowered value in the other currencies.
Be aware that because the price is quoted in $USD, the value may seem higher than it really is. In that case, it may actually mean that the value of US Dollars has weakened, and due to a supply of more gold, it takes more US Dollars to purchase that commodity.
Kitco provides live graphs to view the ongoing changes in the value of gold, silver, and platium.
