Investing and Buying Gold in Malaysia
What influences the gold price?:
A constant issue in the gold market is what influences the price. Most people logically believe the supply and demand figures in the physical gold market will determine the price.However, the futures market in New York is the single largest place in the world where more gold contracts are traded than any other. The price at which the physical gold changes hands, in almost all cases, depends on the price at the New York exchange. Practically all gold bullion and gold coin dealers will base the price of their transactions on this price.
Therefore, the supply and demand at the NY exchange is probably the single most important factor (at least in the short term) in determining the outlook for the gold price. We can see large changes in the supply or demand in the physical market, but if the price does not first change at the exchange it is not likely to change the price of the physical gold.
Of course, in the longer term, supply and demand in the physical market will cause the futures market to change accordingly, but significant and sustained changes in the physical gold market are few and far between.
