Explain movements in the value of gold expressed in dollars US Interest Rates Another factor affecting the price of gold is US interest rates Since gold does not earn interest it must compete with interestbearing assets for demand According to precious metals analyst Kirill Kirilenko the price of gold rose sharply between and mid and again between and when the Federal Reserve raised interest rates to respond to rising inflation Golds performance was almost entirely a result of its perceived status as a hedge against inflation An increase in US interest rates often
provides support to the dollar and affects the price of US dollardenominated gold However falling prices elsewhere could make gold more attractive to both investors and consumers There is also a psychological aspect to the value of gold as during times of AustraliaWhatsApp uncertainty or geopolitical turmoil the price of the metal tends to rise as confidence in governments diminishes On the other hand in times of peace the price of gold tends to fall However gold maintains its negative correlation with the above but most importantly because it is an internationally traded currency Share
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