5 Key Factors that Make Gold Prices Rise

Jakarta, Pintu News – Gold has always been a favorite choice in the investment world, especially in times of economic uncertainty. But lately, many people have started to wonder, why does the price of gold continue to increase? Is this just a momentary trend, or are there underlying factors driving this increase?

In this article, the 5 main factors that cause gold prices to keep soaring will be discussed. By understanding these, you can better recognize the dynamics of the gold market. The question of why gold prices continue to rise often arises, as gold is considered a stable and safe asset, especially when economic conditions are uncertain.

1. Global Economic Uncertainty

One of the main reasons why gold prices continue to rise is global economic uncertainty. When the world economy is unstable, investors tend to look for safe assets, such as gold. For example, during the COVID-19 pandemic, gold prices soared as many countries went into recession and markets were uncertain.

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In addition, financial crises or political turmoil can also push gold prices up. Gold is seen as a safe haven asset that can retain its value even in the worst situations. Therefore, it is important for you to monitor global economic conditions in order to understand the causes of rising gold prices.

However, it should be noted that economic uncertainty is not the only factor. There are times when gold prices remain stable despite economic turmoil. Therefore, you also need to look at other factors that influence the price of gold.

2. High Inflation

Inflation is one of the main factors that answer the question of why gold prices continue to rise. When inflation spikes, currencies tend to weaken in value, and gold is seen as a wealth hedge. Gold has an intrinsic value that is not affected by inflation, so many investors turn to gold when the purchasing power of money declines.

In addition, high inflation can also reduce people’s purchasing power. Under these conditions, gold becomes an attractive investment option because its price tends to rise along with the increasing prices of goods and services. For those of you who want to invest in gold, the inflation rate is an important indicator that must be considered.

However, the relationship between inflation and gold prices is not always directly proportional. There are times when inflation is high, but gold prices do not rise significantly because they are influenced by other factors, such as monetary policy or interest rates. Therefore, it is important to look at the overall economic picture.

3. Weakening US Dollar

The United States dollar has an inverse relationship with the price of gold. When the value of the dollar weakens, gold prices usually increase. This happens because gold is traded denominated in US dollars, so when the dollar weakens, gold becomes cheaper for investors using other currencies.

So, why does the price of gold continue to rise? One answer is because the US dollar is weakening. In addition, a weaker dollar can also increase demand for gold from countries with currencies that are stronger than the dollar.

For example, if the dollar weakens against the rupiah, then Indonesian investors may be more interested in buying gold as it is relatively more affordable. This can certainly push the price of gold up further.

However, it should be noted that the relationship between the value of the dollar and the price of gold is not always direct. There are times when the dollar weakens, but gold prices remain stagnant as they are influenced by other factors.

4. Loose Monetary Policy

Loose monetary policy, such as interest rate cuts or quantitative easing, is also one of the reasons why gold prices continue to rise. When central banks lower interest rates, yields on investment instruments such as bonds become lower.

Usually, in this condition, investors will move to gold which, although it does not provide a yield, is considered safer and more profitable in the midst of declining interest rates. In addition, low interest rates can increase market liquidity, which in turn will push up the prices of various assets, including gold.

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For those of you who want to invest in gold, it is important to monitor the monetary policies of central banks, especially the Federal Reserve (Fed) in the United States. The policies adopted by the Fed have a major influence on the global gold price.

5. High Physical Demand

Demand for physical gold, especially from the jewelry sector and the electronics industry, is also a reason for the rise in gold prices. In countries like India and China, gold has high cultural value and is often used as jewelry or wedding gifts.

The high demand from these countries can push gold prices up. In addition, the technology industry is also increasingly using gold for components in electronic devices, adding to global demand.

It is important to understand that demand for physical gold comes not only from investors, but also from consumers and the industrial sector. The higher the demand, the greater the potential for gold prices to rise.

Gold in Crypto: When Physical Assets Meet Crypto Technology

As blockchain technology develops, gold can now be owned not only in physical form such as jewelry or bars, but also in digital form through gold-based crypto assets.

One of the most popular is Tether Gold (XAUT), a physical gold-backed ERC-20-based stablecoin, where 1 token represents 1 troy ounce of pure gold. The gold is stored in vaults in Switzerland and each token is directly linked to certified gold bullion. The system uses automated algorithms to efficiently manage the allocation of gold and Ethereum addresses.

XAUt tokens are available and traded on various crypto exchanges. XAUt is also an attractive alternative for those looking to hedge against inflation or global economic uncertainty, while remaining within the digital asset ecosystem.

Understanding the Factors of Gold Price Increase Before Investing

Understanding the reasons why gold prices continue to rise is essential if you want to start investing in gold. There are various factors that affect gold prices, ranging from global economic uncertainty, high inflation, weakening US dollar, loose monetary policy, to high demand for physical gold.

However, keep in mind that the price of gold is not influenced by just one factor. A combination of various economic and global conditions can cause gold prices to rise or fall. Therefore, you need to keep abreast of market developments and do your research before making an investment decision.

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities are subject to high risk and volatility, always do your own research and use cold hard cash before investing. All activities of buying and selling Bitcoin and other crypto asset investments are the responsibility of the reader.

Reference:

• Treasury. Why Does The Price of Gold Keep Rising? Recognize 5 Driving Factors. Accessed on February 6, 2026