Whether you're considering the purchase of gold jewelry, or are thinking of selling a piece to sell that has been handed down from your great grandparents, it is a good idea to learn how gold is priced. In truth, gold value is determined through the comparison of supply and demand. This is the primary reason that you may see the price of gold spike at certain times and plummet at others.

Gold Use

One of the major driving factors behind the price of gold is the use of gold. This is considered the "demand," and plays an important role. Gold is used for many applications, not just jewelry. It can be used to make computer parts, car parts, and so much more. When manufacturers and jewelers are using the precious metal, the demand goes up. The price may not necessarily go up with it, unless the supply is low.

Gold Supply

Even in high demand, the price of gold may not go up too high if it is in great supply. When a new mine, or even an existing mine, hits the gold jackpot, buyers may notice that the prices go down a little bit. It may plateau at some points if the mines are producing a constant supply. When the mines begin to be well-picked through and do not produce as much of the precious metal, buyers will see the prices start to increase.

Other Factors

Of course, supply and demand aren't the only factors that play a role in how gold is priced. In fact, there are almost infinite factors that affect the value of gold. Whether you are looking to sell your gold, or are just curious how much it is valued at, it can be helpful to understand how the price of gold is determined. For more information, speak to an experienced and reputable jeweler in your area. Call (480) 949-9299 today to learn more about how gold is priced or to receive the best price for your gold jewelry from the professionals at Ralph Mueller & Associates.