Psychology able to affect price of gold

Ancient alchemists tried to create gold from a diverse mixture of common elements. The behavior of the gold price is the result of a diverse mixture of modern common elements. These include the strength or weakness of the US dollar. It includes the timing of the inevitable rise in interest rates in Europe, America, and other countries such as Australia. Added to this mixture is the strength of the Chinese economy and global reactions to increases in bank capital reserve ratios. Of course, the fundamentals of supply and demand are also added to the mixture. This is an effervescent combination that adds volatility to the behavior of the gold price.

It is possible that gold can reach $2,000 an ounce as predicted by some American analysts. The unique features of the gold market make it more difficult to reliably estimate the price targets for gold in 2010.

The price of gold is not directly correlated to the fundamentals of demand and supply, such as the seasonable increase in Indian jewelry demand. The gold price is directly linked to the strength or weakness of the US dollar. This is also linked to political decisions about interest rate policy in America. The behavior of the gold price is mainly created by emotional and psychological behavior when traders and investors react to political decisions