Gold: The Basics
* The price of the metal has increased substantially over the past 50 years.
* Its price is driven, like most commodities, by supply and demand.
* The lion’s share of the world’s gold is held in the vaults of governments and central banks, but a good deal is also held in storage by individuals or worn as jewelry.
* Gold is also used in industry, although this factor is less important in terms of its price because the quantities used are modest.
* Gold continues to be mined, but the supplies are limited and the mining gets more expensive as stores are depleted. Production has leveled off since 2016.
* Investment demand, especially from large ETFs, is another factor underlying the price of gold.
* The price of gold is generally inversely related to the value of the US dollar because the metal is dollar-denominated. As a result, gold is often seen as a hedge against inflation.