The Current Gold Price
Below we explain some of the biggest influences responsible for the movements of gold prices. We also cover the main units used to weigh gold, like grams, ounces, and other international measurements. Such measurements are important to know and familiarize yourself with if you’re tracking gold prices as an amateur speculator or professional trader.
Read on to find out why gold is still the most popular precious metal, why its value is mostly quoted in US dollars, and ways you can trade this commodity.
What Moves Gold Prices?
When you ask people about what the main factors are that move gold prices, you’ll get a broad range of answers. However, it’s quite simple to understand the underlying influences on gold’s value. There are two foundational pillars of gold’s economic role.
- Environmental and Technological: Since gold is a natural resource found within rocky formations, there is a limited supply that we can access. Gold takes a long time to form, and we still don’t quite know how it comes into existence. With the advancement of various mining technologies, we keep on extracting gold, and the amount of “new” gold that comes to the market is determined by:
- The amount of gold we’re able to extract from natural rocky formations that usually surround gold
- The mining technology at our disposal to do so.
- Economic: Once gold is mined, there is one more step before it comes to the open consumer market. If all newly supplied gold was released for consumers to buy, there would be too much gold, and the value would plummet. Much of the stock-control of gold is determined by socio-political factors. So, the amount of gold released to retail and commercial markets is decided by the governing and private bodies who hold regulatory authority over such markets.
Environmental Threats to Gold Prices
When we talk of environmental factors affecting gold prices, we can look at directly observable phenomena, like the weather. Earthquakes are perhaps the greatest threat to gold mines and extraction operations and they can greatly hinder the expected gold output.
Gold mining also accounts for high concentrations of toxic waste, like cyanide, as shown by the cyanide spill of the Baia Mare gold mine. Over 100,000 cubic meters of cyanide concentrated water was spilled into public rivers, toxic to humans and animals alike.
Hurricanes, tornadoes, tsunamis, or even wildfires can be a great threat, although as technology advances, gold mining operators plan and execute craftier precautions. In any case, when such extreme upheavals of the natural environment come about, gold prices tend to move along with them.
Supply and Demand of Gold on Prices
It may come as a surprise that gold, like many other markets, has controlled supply and demand. This was once a well-kept secret, though, in recent years, more of us have come to learn that not all mined and refined gold is released to the open market.
In 1999, many European central banks signed the Central Bank Gold Agreement (CBGA), one that limits the amount of gold that can be sold each year. More such agreements have been signed since.
In terms of retail and commercial market influences on gold prices, we have two main drivers:
- Fashion: Gold is primarily a fashion emblem and has been for a long time. The metal’s use in various fashion, jewellery and other consumer industries obviously impact gold prices.
- Practicality: As it happens, gold is a great electric conductor and is used in computing hardware. You will probably find tiny bits of gold on exceptionally high-quality computers. Gold is also used to apply a thin coating to spacesuit visors to protect astronauts from excessive solar exposure. The same is done for satellites, so there’s certainly increasing practical demand for gold on this front.
How Is Gold Weighed?
Typically, we’re used to seeing gold weighed in grams (g) or ounces (oz).
One ounce is approximately 28 grams. The average retail consumer is unlikely to buy a kilogram of gold, and so the main weight units to track gold prices are grams and ounces.
That said, there are many other units used to weigh gold and showcase gold prices:
- Troy Ounce (t oz): Mostly used to measure gold bullion. You can see examples of “t oz” gold prices with some of the bullion dealers listed below. One “t oz” is equal to 31.1034768 grams.
- Kilogram (kg): One kilogram is equal to 1,000 grams. This unit is also used fairly widely, especially among commercial and larger volume retail markets.
- Tonne (t): The most common places to hear of literal “tonnes” of gold are in the news, financial papers, or adventure and gangster stories. Still, gold can be measured in tonnes. (Note: a tonne is eaqual to 1,000 kg — roughly 10% more than a ton.)
- Tael (in traditional Chinese: 兩): A Chinese unit of measurement, now standardized to 50g. However, you can see different taels used to measure precious metals around the world. For example, some consumers may be able to find 37.5g gold taels, a type of bullion.
- Tola (in Hindi: तोला): Used by ancient Indian and other South Asian cultures to measure gold. The tola as a measurement unit is now standardized to 3/8th of a troy ounce, about 11.66 grams.
How gold is weighed depends on the size of the market you’re looking at, the typical transaction volume, and the country of origin. Gold prices are presented in many currencies and weight units, but the most typical ones are still ounces, troy ounces, or grams.
Is Gold the Most Popular Precious Metal?
Gold is only the third most valuable precious metal in the world behind Rhodium and Palladium.
However, gold is the most popular precious metal because of its historical reputation as a store of value. Gold’s reputation as a financial “safe haven” still lives. Additionally, gold’s long use as a currency also makes it popular.
None of this means that the popularity of gold is entirely dependent on its history. It is still used in industries today and has remained a popular metal to make jewelry with.
If we look at gold prices over the last several decades, we can see that fluctuations correlate with global economic swings. If we compare gold prices to historical inflation of major currencies in similar timeframes, we see that gold speculators have had plenty of opportunities to exit the market with a profit, or less money lost.
That said, gold is still as risky as any other store of value — it is most definitely not a safe haven. Let’s call it a potentially lower-risk asset.
Why Is Gold Usually Quoted in USD?
From the mid-to-late 1800s, countries like the US abided by an international monetary system named the “gold standard.” This meant that each unit of a given currency was defined by a specific weight of gold. The US dollar became the world reserve currency in 1944, and so gold prices have mostly been quoted in USD ever since.
The gold standard system lived on-and-off until the 1970s.
Well before the gold standard system was introduced to value fiat currencies, gold was already a trade currency in many parts of the world, with South Asia being the center of gold trade. The gold standard was actually preceded by the silver standard, back when silver coins were still an everyday currency.
Great Britain was the main driving force behind the global adaptation of the gold standard. It is said that Sir Isaac Newton, a former member of the Royal Mint, contributed to forcing silver coins out of circulation by setting unrealistically low silver-to-gold exchange rates.
With the combined impact of the gold standard and the Breton Woods system, gold prices are still mostly quoted in USD. However, many gold bullion dealers list gold in several international currencies.
Ways to Trade Gold
If you’ve been following gold prices and are wondering how to trade the commodity, there is more than one way to do so.
In this table, we explain basic information about each way to trade. Not all ways of speculating involve owning gold, and there are other time and monetary factors to consider.
|Trading Method||Ownership||Management Costs||Security Costs||Expiry Date||Mgmt Cost||Leverage|
Gold Bullion Dealers
Pretty much anyone can own gold. Bullion dealers are perhaps the fastest and lowest-risk way to put money into gold.
If today’s gold prices made you decide that it’s time to buy, here are some reputable gold bullion dealers we’ve reviewed:
Learn More About Gold
Interested in learning more about gold? We have a handful of guides and articles that can teach you about gold as a metal and commodity, as well as other aspects of this fascinating metal:
- Gold As A Commodity: A guide on what makes gold so valuable — a little more detailed than what we’ve covered on gold’s value in this guide.
- How To Trade Gold: An in-depth look at different trading instruments and third-party services you can use to speculate on gold prices.
- Bullion Dealer Guide: A guide on how bullion dealers work and how to choose one when buying gold.
- Gold vs Stocks vs Real Estate: An exploration of gold compared as a store of value to stocks and property.
- Gold IRAs: A article on why people may consider purchasing gold IRAs, covering both the advantages and potential pitfalls.
See our economic overview of these top gold trading countries — these nations have a significant impact on gold prices:
- United Arab Emirates: 6th largest gold exporter
- Turkey: Over $300bn worth of gold exported each year
- Switzerland: One of the world’s top 10 gold reserves
- Hong Kong: 5th largest importare of gold
- Canada: 7th largest gold exporter.
You can find live prices and guides for other precious metals here:
How do I check the price of gold?
You can check the live and historical price of gold with our live gold price chart at the top of this page. There are also many bullion dealers and online brokers that can give you an up-to-date gold price. It is typical for gold prices to have minor variations when you check multiple resources.
How does inflation affect gold prices?
While there is no single trend that can define fiat money inflation’s relationship to gold prices, the shiny metal’s value tends to rise as the value of the comparable currency, like USD, falls. This is because gold is often used as a hedge against inflation.
Who controls gold prices?
Gold prices are controlled by the organizations that have the authority to regulate the supply and demand of gold’s two consumer markets — commercial and retail. The individuals heading up organizations like the World Gold Council, as well as large private and public gold-related firms are of great influence on gold prices.
What was the price of gold in 1970?
According to the data from our gold chart, the price of gold was just under $35 US dollars per ounce (oz) on January 1st, 1970. Gold peaked at $39.01 per oz in October of 1970, with its lowest annual price of $34.75 towards the middle of January. Gold closed the year beating the $37 per ounce mark.