As of 26th October 2022, one ounce of gold is valued at £1441.41 - according to our live gold price tracking chart. In terms of grams, one gram of gold on 26th October 2022 is £46.34. Naturally, these prices will fluctuate, but what causes these fluctuations? How does gold go from one value to another?
Many people don’t understand the contributing factors that determine the price of precious metals until they get stuck into investing. In truth, the value of gold is affected by the fluctuating gold price, the quantity of gold, and the shape that it is in. Below, we look at all the factors to take into account when seeing how valuable gold is:
The Factors Causing Gold Prices To Fluctuate
If you currently have gold investments, you want to know what can make them worth more or less in cash terms. We’ve already mentioned the current gold price per ounce or gram, but what causes this to go up and down?
Primarily, you have three key factors to keep in mind:
- The demand for gold
- The supply of gold
- External events
When we talk about the demand for gold, we’re assessing how much people want it. Consumers can sometimes go through phases where gold is at the top of their priorities, encouraging more and more people to make investments. Likewise, gold has a demand as a resource. We often forget that gold is a precious metal with interesting qualities, meaning it is used during the manufacturing process for lots of different goods. Typically, gold is used to create jewellery, but it also plays a key role in the production of electronics. Thus, there are periods when the demand for gold goes up as many companies need it to create different products.
When there’s a high demand for gold, it typically raises the price per ounce. Conversely, if the demand is low, gold prices tend to drop.
Clearly, gold doesn’t grow on trees. It’s a resource that must be mined. As such, the supply of gold can either be very good or very bad. If mining companies can’t find gold deposits, the supply will decrease. When the supply is low, but the demand is high, gold prices will soar.
Ironically, external events can make gold prices go through the roof. If we’re in a period of political unrest or economic uncertainty, gold is one of the few assets that become more valuable. Why? Because investors turn to it as a reliable home for their money. The stock market and housing market can crash, while gold remains relatively stable. If you take a look at our live gold price chart, you can see this in action. At the beginning of 2020, when the pandemic hit, the price of gold increased dramatically thanks to economic uncertainty.
What Makes Your Gold More Or Less Valuable?
Aside from the market price at the time, what can make your gold more or less valuable?
- Purity
- Weight
- Type of gold
The purity of gold in jewellery is measured in carats, with 24 carats being pure gold. Investment gold bars and coins have their purity recorded as fineness or parts per thousand of pure gold. 995 parts per thousand or 995.0 fineness and above are regarded as pure gold in order to qualify as Investment Gold. There’s a scrap gold calculator on our sister site that lets you input the purity and weight of your gold to get a current price for it.
Generally, the purer your gold is - and the higher the quantity - the more it will be worth. Additionally, the type of gold you have will play a role. Here, we are talking about whether you have gold bars, gold coins, or scrap jewellery.
Normally, scrap jewellery is worth the least. This is because it will have the lowest gold content and purity when compared to bars or coins. If you want to get the best value from a gold investment, always get coins or bars. We have a detailed article that explains more about the different types of gold and which is the best one to buy.
If you want to know what is the price of gold or how much is 1 ounce of gold worth today, the current answer is £1441.41 as of 26th October. Of course, this price can fluctuate daily based on the factors mentioned above. It’s important to know what can influence gold prices as this lets you figure out when to invest and what might cause your gold investments to go up or down. Lastly, if you’re interested in making a purchase of Investment Gold products, we sell gold bullion online - along with other precious metals.
