What makes gold so expensive? know the factors behind
Gold Price Today- 18May and What makes gold so expensive? know the factors behind: Gold price is trending high since the last week. As of 18May, 24-carat gold is ₹9,513 per gram, 22carat gold is priced at ₹8,720 per gram and 18carat gold is priced at ₹7,185 per gram. There can be mild difference city-wise. For instance, the price of 18carat gold in Chennai is ₹71,850 per 10g where as 18carat in Bangalore is ₹71,135 per 10g.
And according to experts, below could be the possible reason behind the fluctuation of gold price. Change in any of the factor can influence the price of gold either increasing or decreasing. Financial institutions and Analysts along with experts are actively researching and analyzing the dynamics affecting the price of gold in the mid-May 2025. Also, according to David Einhorn, an American investor, the increase in gold price is nothing to do with the inflation whereas it could be because of eroding confidence in U.S. fiscal and monetary policies. However, this is not proven yet. And Mohamed El-Erian, Egyptian American economist and businessman shares the same concern.
And other economist like, Edward Yardeni, Israeli-born American economist predicts that gold could surge to $3,500 per ounce.
–Fluctuations influenced by various global economic factors
(What makes gold so expensive know the factors behind)
Geopolitical Tensions
Geopolitical tension could be one of the reasons what makes gold so expensive. Owing to the ongoing conflicts, such as the rising tension between India and Pakistan and renewed conflict between Israel and Gaza and gold as a safe-haven asset leads to increase in demand during such instability.
Federal Reserve’s Interest Rate Cuts
The US Federal Reserve in 2024 has cut interest rates several times and is expected to even lower them more. When interest rates fall, it becomes less costly for investors to hold assets that don’t earn interest, like gold. Thus, pushing prices up and this could be one of the reasons what makes gold so expensive.
Weakening U.S. Dollar
When the U.S. dollar weakens, it lowers the cost of gold for buyers, effectively making it affordable in international markets. Recent declines in the dollar’s value have contributed to the rise in gold prices contributing to the theme what makes gold so expensive.
Central Bank Purchases
Central Banks around the world, also RBI (Reserve Bank of India), have been increasing their gold reserves. RBI bought 77 tonnes of gold in 2024, a five-fold increase from the previous year. When the demand is high among banks too can contribute to ‘what makes gold so expensive’.
Inflation Concerns
Even though people have different perspective on ‘what makes gold so expensive’, there could be other factors too. Driven by possible rises in government spending and tariffs, despite attempts to keep it in check- Inflation worries remain. Since gold is seen as a reliable hedge against inflation, investors are increasingly using it to safeguard their money.
Investment Demand
Amid ongoing market volatility and economic uncertainty, both retail investors and large institutions are shifting more of their funds into gold. To sustain geopolitical risks, inflation, gold offers protection. This growing preference for safety is fueling higher demand for the metal. And as we know gold is such a metal with rare properties which brings interest among investors. And when investors are into gold investment, which leads to the conclusion of ‘what makes gold so expensive’.
To know the city-wise gold price on May17, click on https://avvytimes.com/city-wise-gold-rate-today-17may-check-24k-22k18k/#more-945