GoldPaq

If you are considering selling your old gold jewelry, old gold scrap, or old gold coins, then you are lucky enough to be selling in one of the best markets for gold in recent history. Gold values have reached astronomic levels recently, which translates to excellent returns for those who wish to sell their gold.

But why is gold so valuable now? There are several factors that affect the value of gold, but the two largest factors are the gold market, and the financial markets.

The gold market is affected by many different variables, variables that are tied directly to the value of gold in the financial market. Among these variables, two that affect the gold market most are the cost of mining gold the cost of refining and shipping gold.

Mining New Gold Isn’t Cheap

When the costs of mining and shipping gold rise, the price of gold will inevitably rise in response. The same costs of doing business that you see rising in America, which include higher fuel and electricity costs, are rising throughout other countries (including America) where gold is mined. Because gold mining is an inherently expensive and difficult undertaking, it is very closely tied to the costs of fuel, electricity, and manpower.

Consider: gold is a rare and precious metal. It appears in the earth’s surface in very low concentrations. Thousands of tons of ore must be mined to produce a significant amount of gold. The cost of mining these thousands of tons of ore is high; it takes expensive and sophisticated machinery to create gold mines, machinery that is completely dependent on both electricity and fuel. Furthermore, once the ore that contains gold has been mined, the gold must be separated from the ore using a chemical process that is both time-consuming and costly both in terms of the cost of the products used to extract the gold, and the manpower required to do so. Thus, as fuel, electricity, chemical, and manpower prices rise, so too does the cost to mine gold.

As you might have guessed, the price of mined gold is also affected by transportation costs. When the expense of transporting gold rises, the price of newly mined gold reflects this increase, which is reflected in the market price for gold. Therefore, when the price of mining gold goes up, so does the cost of gold to those who would use it in manufacturing.

When Financial People Worry - Buy Gold!

Gold values are also tied to the financial markets. When the financial markets are viewed by experts to be unstable, then gold, which is considered to be a relatively stable commodity, rises in value. For instance, when the value of the American dollar falls on the international markets, the price of gold will often rise. This is due to the perception that gold, which is also considered a currency, is a more stable currency than the American dollar or other countries’ currencies.

Furthermore, when there is a fear that a period of inflation is on the horizon, as many financial experts are forecasting now, the price of gold will often rise. Many financial experts use the price of gold on the market as a harbinger for an inflationary period; when the price of gold begins to rise, inflation is sure to follow. In fact, the last time the value of gold rose as it has recently was the inflationary period the U.S. Suffered during the late 1970s.

So what does all this mean for those who have gold to sell?

When gold becomes more expensive to mine, the value of existing gold goes up, as well, because there is a greater demand for gold that can be recycled. Existing gold will always be less expensive to use in trades that rely on gold for manufacturing. However, it becomes more profitable to sell for those who have it.

Gold scrap is especially valuable for those who use gold in manufacturing, not only because it is much less expensive to purchase than mined gold on the market, but also because it is easier to procure. The demand for gold scrap, such as that contained in old gold jewelry and dental scrap, is easily recycled for the needs of manufacturers, which contributes to its high demand in the marketplace.

If you have considered selling your old gold jewelry and gold scrap, but just haven’t gotten around to it, do not hesitate. Contact a gold broker like GoldPaq today, while gold is selling at historic highs. You’ll be glad you did!

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