A casual search through Google reveals a glut of experts and websites touting their systems for predicting the future price of gold. To be sure, many of their past predictions have come true. But is this the result of a methodical approach or simple luck? After all, a broken watch is still correct twice a day.

When it comes to buying and selling gold, many of the biggest traders in the world are forced to make educated guesses. Suffice to say, if there were a foolproof system of predicting gold prices, they would know about.

In this article, we’ll take a closer look at the price per troy ounce, and why attempts to predict future movements are destined to fail. You’ll also learn how to go about selling your scrap gold pieces to take advantage of the recent surge in prices.

How The Price Of Gold Is Tied To The Dollar

The price of gold and the dollar share an inverse relationship; one zigs while the other zags. When the dollar loses ground, gold prices rise. It’s important to highlight, however, that the two do not share a perfectly correlated relationship. Large movements in one are matched by smaller movements in the other.

Over the last several decades, the value of the dollar has steadily eroded due to inflation. During this time, the price of gold has climbed. Because inflation has been a foregone conclusion for nearly 100 years, those who predicted such a climb were essentially making a safe bet. There have been brief periods of monetary contraction, but these have been rare (most notably, 1921, 1931, and 1932).

Supply, Demand, And The Price Of Gold

A common question involves why gold and the dollar are inversely related. If you can understand the following principle, you’ll have a better foundation to decide whether now is the time to sell your old gold jewelry and scrap pieces.

The dollar is a unit of monetary exchange. However, it is a fiat money, which means it has no intrinsic value. Gold is also a unit of monetary exchange. Unlike the dollar, it has intrinsic value based on the underlying metal. The metal is limited. It cannot be printed like a fiat currency. For this reason, it is commonly used as a store of value.

Both gold and the dollar are subject to the laws of supply and demand. Given a limited supply, the higher the demand, the higher the price. When people fear the erosion of the dollar’s value, they often buy gold. Thus, the price per troy ounce increases in relation to the dollar.

What To Do If You Want To Sell

Let’s suppose you’re convinced the dollar will rise in the near future, causing gold to correct. In this case, it makes sense to sell any gold items you own since a correction will lower their valuation. There are several ways to do this, but the most advantageous (i.e. profitable) method is to sell your old gold jewelry and scrap gold to an online refiner.

With gold prices reaching record highs, there has been a large number of would-be buyers aggressively courting sellers. An important distinction is in order. Most of these buyers are brokers, not refiners. As middlemen, they make their profit by the spread between the price they offer you and the price the receive for the same gold pieces. So, to whom are these brokers selling your gold watches, necklaces, earrings, and bracelets? They are selling them to refiners.

You can bypass brokers entirely and work directly with refiners online. This removes the middleman from the transaction. As a result, you’ll receive a higher price for your scrap gold and assorted jewelry pieces. If you work with a refiner that has plenty of experience and a good reputation in the industry, you can expect a trouble-free transaction.

Author Bio: The best online resource for Cash For Gold or sell Gold Online can be found at refinity.com

Category: Finances
Keywords: gold, price of gold, future price of gold, predicting the future price of gold, worth gold