Gold was dropping and it had a great fall. People had anticipated, in fact are anticipating that it has to fall further but the trend has somewhat changed at least for the last few days. Before just trying to know why and how gold is increasing, let us try to examine why had it faced the crash? Gold fell so harshly that it was about to enter a death cross. One might get surprised to know that gold prices fell by 13 percent since April 2013 in two sessions which is supposed to be one of the biggest crashes in the gold prices.

There may be several reasons why the gold prices fell; some of them are discussed below. One of the important reasons is the real interest rates in the market. Gold prices are favored only when the real exchange rates are either falling or at the low level. But the case was not so, therefore the gold prices peaked. Only when interest rates in the market do not give investors their desired output, they try out for the gold. The other important factor that swamped the gold prices was the fear of the general public regarding the gold market.

It is human psychology that when things are not that fine, economic activities are not as expected, people think about buying the gold and making their future secure but these days, when the major economies across the globe have been recovering from their deep economic slump, people are fearing about the gold prices. Experts suggest that in these circumstances, if we try to analyze the index that measures the market fear we get to our desired output. Besides that, J P Morgan’s Index signifies the overall inflation status in the globe and when the inflation is high, gold prices are higher and in the same way, lower inflation brings the gold prices down.

But now the gold prices are advancing since few days and the major reason to this is the increased demand for the physical delivery of the product. Currently, the yellow metal has rose up to 0.6 percent which has made many investors optimistic about the safe haven again. The demand for the gold has been increasing owing to the requirement of coin and jewelry in United States of America, China, and India. Gold contracts at the major economies are increasing and many investors have started to become optimistic.

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.