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How are Gold rates determined

Posted on 2016-11-01
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Last Modified: 2016-11-20
Hi,
Dont know whether this is a valid question to ask on Expert Exchange.. But really curios if could get answers to general questions like this..
I want to understand how Gold rates are determined and whether Gold will increase in the next 10 years or not..
Any videos links or articles will also be good.

Thanks
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Question by:Rohit Bajaj
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Dr. Klahn earned 1000 total points (awarded by participants)
ID: 41868194
Gold prices are determined by the prices that purchasers are willing to buy at and sell for on the various commodities exchanges such as the London exchange.

The price of gold reflects both its intrinsic value and market speculation.

The price of gold has historically increased over the long run because gold generally maintains its "intrinsic" value against inflation.  So long as governments print fiat money in larger amounts than they take in taxes, the price of gold must necessarily increase for gold to maintain its intrinsic value.

(The "intrinsic" value of gold is, imo, a misconception.  The intrinsic value is not identical across all societal conditions.  For example, if 90% of the human population were to be wiped out by plague, gold would be worthless as it would have neither practical nor speculative value to survivors trying to eke out a living.)

The speculative value, over and above the intrinsic value, goes up and down depending on economic conditions, national economies, consumer fear, and catastrophes.  Whether the speculative value will increase in the future is anybody's guess, like every other stock market or commodity market price.
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by:viki2000
viki2000 earned 500 total points (awarded by participants)
ID: 41868306
I find your question interesting.
It is called "Gold fixing" and refers to names as N M Rothschild & Sons.
For others may be just a currency.
Here are some charts 1, 2
But maybe next essay from Princeton university gives a interesting insight.
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by:Tiras25
Tiras25 earned 500 total points (awarded by participants)
ID: 41868744
The market rate for gold is priced by trades executed on various commodity exchanges, just as stock prices are valued on stock exchanges.  Buyers and sellers put out bid prices.  Those prices are accepted or rejected, driving changes up or down.

10 YEARS, do you think inflation will occur over the next 10 years?  History of gold prices is easy to find.
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by:viki2000
ID: 41894655
The given explanations are valid.
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