Significance of Gold
For over 5000 years, gold has been the most important measuring rod of wealth for individuals and nations. Its resistance to corrosion and scarcity (preciousness) allot value to it. Gold serves as an industrial input, wealth creation measure, trading commodity, and a hedging method. Just like any investment instrument, the value of gold too varies with the macro and micro economic factors. The price of gold today is the outcome of several factors discussed below.

International Gold Prices
For all the buy-and-hold gold investments today, the focus is on value creation that does not appear overnight. Therefore, such investors do not track every move of the market very closely. However, in the case of speculative holding or distress selling, the daily market quote of the metal becomes significant. One interesting paradox here is that the value of gold by itself does not vary much; rather the changing value of the paper currency with the changing economic scenario is the influencer here. In international market, gold is measured in the terms of Troy Ounces or Grams, and its value fluctuates on an almost hourly basis. The price of gold today is fixed in reference to the ‘London Gold Fixing,’ obtained through the collaborative price negotiations of the top five bullion trading organizations:

• Deutsche Bank
• Barclays Capital
• Hong Kong Shanghai Banking corporation (HSBC)
• Société Généralé
• Scotia Mocatta

The intra-day spot price of gold is a derivative of trading at various bullion markets across the globe.

Factors Driving the Gold Prices

• Demand and Supply Factors

Apparently, like other commodities the price of gold today is affected by the demand and supply factors. However, looking at the statistics that almost 66% of the gold reserves have already been mined, it is more of market sentiments and other factors that drive the gold bullion markets.

• Sovereign Interventions

According to the World Gold Council, an approximate 20% of the total gold reserves are with various Central Banks, globally. For strategic reasons, these banks regulate the flow of the bullion in domestic markets, which has a defining effect on the prices.

• US Dollar Foreign Exchange Rates

As an investment measure, when the US Dollar loses its sheen against the major currencies, the price of the alternative instrument, gold, moves up and vice-versa. For instance, the announcement by the BRIC nations on June 15, 2009 to make concerted efforts to maintain their US Dollar reserves and prevent erosion in its value made the gold futures fall by USD 13.2 to reach at USD 927.5 per oz.

• Economic Crises and Political Unrest

In the times of disturbance, the paper currencies, which are prone to international exchange rate fluctuations, take a major beating. This is when gold becomes an even more attractive investment. In the wake of the subprime crisis, as the Dollar value tumbled, gold surged ahead, hitting an all time high of USD 1021.7 per ounce on March 17, 2008.

If you are an investor who is interested in tracking daily gold prices, try to refer to a reliable websites like World Gold Council, Bloomberg, and Reuters etc., which display continuously updated spot and derivative prices during the trading hours.