1. Supply and Demand

Like any other commodity, the price of gold is influenced by supply and demand dynamics. Reasons why gold price is increasing can include factors such as mining output, central bank reserves, and industrial demand, which affect the supply side, while factors like jewellery demand, investment demand, and economic stability can influence the demand side. 

2. Inflation and Deflation

Gold is often seen as a hedge against inflation. When inflation rises, the value of fiat currencies decreases, leading investors to seek safe-haven assets like gold to preserve their wealth. Conversely, during deflationary periods, when the value of money increases, gold prices may drop as investors favour cash or other assets. 

3. Interest Rates

Gold doesn't pay interest or dividends like other investments, so changes in interest rates can affect its price and attractiveness. When interest rates are low, the opportunity cost of holding gold decreases, making it more appealing to investors. Conversely, when interest rates rise, the opportunity cost of holding gold increases, potentially reducing demand and pushing prices down. 

4. Strength of US Currency

Since gold is valued in US dollars globally, changes in the strength or weakness of the dollar can impact gold prices. When the dollar strengthens against other currencies, gold becomes more expensive for investors holding other currencies, which can dampen demand and lower prices. Conversely, a weaker dollar can make gold more affordable and boost demand, increasing prices.

5. Geopolitical Uncertainty

Gold is often considered a safe-haven asset in times of geopolitical instability or uncertainty. Events such as wars, political turmoil, trade tensions, or unexpected events can lead investors to seek refuge in gold, driving up its price.

6. Market Sentiment and Speculation

Like other financial assets, gold prices can be influenced by market sentiment and speculative trading. Investor perceptions, media coverage, and speculative trading activities can lead to short-term price fluctuations that may not always align with underlying supply and demand fundamentals. For instance, gold prices rose to all-time highs when the United States Federal Reserve began hiking interest rates as investors moved to gold as an asset amidst lower yields on fixed-income investments. 

7. Central Bank Policies

Central banks' policies, such as monetary easing or tightening, gold reserves, and buying or selling activities, can impact gold prices. Large-scale purchases or sales by central banks can directly affect supply and demand dynamics in the gold market. 

8. Technical Factors

Technical analysis, which involves analysing past price patterns and market trends, can also influence gold prices. Traders often use technical indicators and chart patterns to make trading decisions, which can contribute to short-term price movements.

9. Confidence in the government

The value of currencies such as USD, EUR, SGD, etc largely depends on the trust in the governments whose formal currency is denominated in these financial instruments. While historically there have been hard assets (typically gold) backing these currencies, in the 21st century, it’s only the confidence in the governments and the performance of the economy that's backing them.

In times when economies are underperforming and/or there’s a decline in people’s trust in their governments, currencies will devalue. Gold has no counterparty (government, reserve bank, etc) risk, it’s a financial instrument that has survived over thousands of years through rise and fall of empires, economic cycles, wars. In times of declining economic confidence,gold price tend to rise rapidly. 

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