The historical significance of gold as jewelry and its electrical conductivity ensures that it will be in great demand in the future as well. In the form of investment, gold has experienced some of the best pricing in the commodity market. Therefore, investing in gold is one of the wisest decisions that you as an investor should take. Whether this commodity will continue to be considered as one of the most inflationary hedges is yet to be seen, its high demand owing to its beauty will always keep the investors on their heels.
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If you are also one of those people who is always worried about the surge in the prices of gold, then this article will tell you about the 5 factors which are responsible for it.
1. Widespread Use as A Commercial Coating
The usage of gold coating on electrical connectors has increased tremendously in the last few years. It can be found on various devices ranging from the video and audio cables to connectors and computers. This widespread usage across the world will always keep its demand high.
2. Shortage in Production
In comparison to the production of gold, the worldwide demand for gold is always high. If the current state of production continues, in the next 45 years, the gold supply will not meet the future demands of gold.
3. Strict Gold Sales’ Requirements
The Washington Agreement and the IMF have set very strict gold sales’ requirements i.e. less than 400 tons annually. Moreover, the members cannot even replace currency with gold.
4. India Being the Largest Consumer
Since India is the largest consumer of gold in the entire world, the demand for gold is always high here. As per the reports, around 700 tons of gold is consumed by India every year.
5. Shortfall in Mining
The estimation by the World Gold Council suggests that the amount of gold mined every year us around 2,500 metric tons and the consumption is around 3,500 metric tons. It is getting difficult to determine how this shortfall is going to be fulfilled.
These were the 5 factors, which greatly influence the high price of gold. If you want to know more about Gold investment or want to get MCX gold silver live calls, contact Gold Operator. For more information about it.
