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While demand varies from country to country, the uses for gold are consistent – jewellery, investing, technology and central bank requirements.
In 2013, the price of gold rose to $1416 toward the end of August, as Indian consumers bought over 617.4 tonnes of gold jewellery in preparation for the wedding season.
The November 2016 presidential election created an uncertain environment for investors, and gold’s price surged as Donald Trump gained popularity – up as high as $1,366 per ounce.
Then after President Trump’s inauguration in January 2017, gold demand hit a two-month high.
The European Central Bank cut eurozone interest rates to 0.0% and rates on its deposit facility to below 0% in March 2016, in the hope of encouraging borrowing and discouraging saving. The low rates available on cash caused many investors to turn to gold: its price went up more than 15% that year, hitting $1,279 per ounce.
So far, all the factors listed here will affect demand for gold – but its supply has implications too.
In 2016, gold production declined significantly for the first year since 2008, with many mining operations downsizing or shutting down completely. To find new gold supplies, scientists have begun developing technologies to detect previously unreachable gold sources, and even exploring the possibility of mining in outer space.
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