The Gold is popular as an investment as investors buy gold as a hedge or harbour against economic, political, or social crisses ( as investment market declines, burgeoning national debt, currency failure , inflation , war and social unrest ) .
The gold market is also subjected to speculation like other markets , especially on the use of futures contracts and deriviates .
Today , the price of gold as with all other commodities is driven by supply and demand and speculation.
Most of the gold is still in accessible form, such as bullion and mass-produced jewellery, with little value over its fine weight and has great potential to come back into the gold market for the right price.
At the end of 2006, it was estimated that all the gold ever mined totalled 158,000 tonnes (156,000 long tons; 174,000 short tons).
As the huge quantity of gold stored above-ground compared to the annual production, the price of gold is mainly affected by changes in demand , rather than changes in annual production (supply).
According to the World Gold Council , the annual Gold mining over the last few years has been close to 2,500 tonnes. But of these about 2,000 tonnes goes into jewellery or industrial production, and only 500 tonnes goes to retail investors and exchange traded gold funds.
According to GFMS , an independent research consultancy owned by Thomson Reuters forecasted that Gold prices will peak in late 2012 and the early 2013 .
In 2011 , GFMS in its 2011 Gold prices report forecasts a volatile year for gold prices . With gold prices sinking as low as $1,600 – $1,550 ( U.S.) an ounce , averaging out at $1,760 and spiking to $2,000 an ounce.