Gold futures (GC=F) opened at $4,007.20 an ounce on Monday, unchanged from Friday’s close of $4,009.80. The price of gold quickly surpassed $4,100, sending gold futures up 56% since the beginning of the year.
There is a real mix of market influences, but gold prices remain higher or at least stable. For one thing, the Federal Reserve remains without key economic reports to guide its decision-making. However, the CME FedWatch tool currently projects a 65% chance of rates falling again next month.
While an ongoing government shutdown will likely only deteriorate the lowest levels of consumer confidence seen in more than three years, the Senate has moved forward with a bill to get the government back up and running.
The doubts generated by the deterioration of economic reports, tariff uncertainty and the weakening of the dollar continue to benefit the price of gold.
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The opening price of gold futures on Monday is up 0.5% from Friday’s close of $3,982.20. Below is how the opening price of gold has changed compared to the past week, month and year:
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A week ago: +0.8%
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A month ago: +1.3%
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One year ago: +49%
Two weeks ago, the price of gold futures rose 50.5% from a year ago.
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The price of gold can be quoted in multiple ways because the precious metal is traded in different ways. The two main gold prices that investors should be aware of are spot prices and gold futures prices.
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The gold spot price is the current market price per ounce of physical gold as a commodity, sometimes called spot gold. Gold ETFs that are backed by physical gold assets generally track the spot price of gold.
The spot price is lower than what you would pay to buy gold coins, bars, or jewelry, as your total price will include a margin called the gold premium that covers refining, marketing, dealer overhead, and profit. The spot price is more like a wholesale price, and the spot price plus the gold premium is the retail price.
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Gold futures are contracts that call for a transaction in gold at a specific price on a future date. These contracts are traded on the exchange and are more liquid than physical gold. They are settled on or before the contract expiration date, either financially or by delivery. A cash settlement involves paying the contract profit or loss in cash. Delivery means that the seller sends physical gold to the buyer for the contracted price.
Supply and demand determine gold spot prices and gold futures prices. Factors that influence the supply and demand of gold include:
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Geopolitical events
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Central bank purchasing trends
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Inflation
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Interest rates
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Mining production
More information: Who decides how much gold is worth? How prices are determined.
Whether you are following the price of gold from last month or last year, the gold price chart below shows the constant rise in value of the precious metal.