In: Finance
When inflation rises the value of currency goes down and therefore people tend to hold money in the form of gold.therefore,in times when inflation remains high over a longer period,gold becomes a tool to hedge aganist inflationary conditions.this pushes gold prices higher in the inflationary period
Therefore if the inflation increase from 2% to 6% by the end of the year then prices of the gold increases according and the prices are moved by the combination of supply,demand and Investor behaviour.That seems simple enough,yet the way those factors work together is sometimes counterintuitive