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The largest demand for gold is in jewelry and investments Gold is known as a metal that is easily used and has many industrial applications Since gold is so durable and luxurious many people invest in jewelry stocks and gold bonds Considering the fact that gold is considered a world-wide valuable good many economies have gold reserves to help protect themselves in times of need Nevertheless factors of supply and demand have contributed to the decrease of the price of gold which has reached an all time low since 1978 This reduction has raised many concerns in the United States having them weigh the different factors of the price supply and demand and consumption that may be affecting the price change The price change commands attention since gold serves to indicate price stability or inflation Although inflation is not as threatening in the United States because it is more industrialized the bigger fear is facing deflation with our countries gold currency Gold averaged 294 dollars per ounce in 1998 when at one time the prices were in the mid 400-500 per ounce Due to fact that gold prices have been so low Central Banks have threatened to sell their gold inventories fearing that gold is no longer considered the ultimate store of value Regardless prices have continued to fluctuate in both directions throughout the year but it is important to weigh the different variables that are having an effect on the price There are different factors associated with the supply and demand which have caused prices to decrease First of all the record low prices in the past year has caused investors to participate less causing prices to be determined largely on golds own supply and demand fundamentals and the economic environment The supply of gold declined by less than 2 during 1998 The price reduction started to impact the mine production by slowing the rate of manufacture growth by the end of 1998 When
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