While most of the attention has been on domestic gold prices, world gold prices have been rising steadily as well. There are a variety of events going on all around the world contributing to the rise in gold prices. There are also occurrences that are preparing world gold prices for even more growth. For example, these include falling currency values, rising tensions in South African countries, etc.
The Chinese are already holding one thousand tons of gold and are continuing to stockpile more, adding to the overall global demand. There is also some speculation that the Chinese are planning another acquisition of ten thousand tons. Although these are only rumors, this can be enough to cause an up-swing in world gold prices. If these rumors prove to be true, changes in prices will certainly show it.
All around the world, nations are going deeper into debt. This, in turn, causes the value of the currencies of these countries to fall. Countries today rely primarily on fiat currency. This is money which derives its value from the promises of the country’s government instead of a tangible commodity. When governments around the world begin to increase their national debt, the value of their currencies falls and world gold prices increase.
The supply of gold has been increasing at a lowered rate due to the political and social turmoil occurring in South Africa, where most of the current gold mining takes place. This mining has been disrupted because of all the tumult that has been plaguing this part of the country recently.
Due to national accumulation and lessening supply growth, world gold prices are setting new highs at a record pace. No one knows how long this will go on for, but if current trends are any indicators, gold prices are just starting to show their potential.
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