In the following table you will find the main factors/drivers influencing the gold price, demand and supply.

Demand /supply side factors of the gold price:

1. Number of middle class families (most families retain financial insecurity by holding gold jewelry) http://www.lbma.org.uk/forums/5b.DesebrockLBMAND2003.pdf 2. Age of generation – the younger the population the more is spent on jewelry ( marriage occasion) 3. Central bank sales 4. Producer Dehedging - the reduction of hedge positions by producers (dehedging) are creating a solid floor price for gold 5. Gold Mining Production 6. Prosperity of Asian countries http://www.moneyweek.com/file/11791/why-gold-will-keep-going-higher.html 7. Gold is recognized as money http://www.bankintroductions.com/gold.html 8. Declining mine supply and the difficulty finding new deposits 9. Large short positions 10. Small market capitalization of publicly traded gold companies http://www.bankintroductions.com/gold.html 11. Introduction of Exchange Traded Funds (ETF’s) - easier to own physical gold http://www.bankintroductions.com/gold.html 12. Investment demand (bullion-backed securities) http://seekingalpha.com/account/subscribe/manage?source=article_comment 13. Astounding value of derivatives 14. Income growth – gold price growth http://www.pensions.gold.org/us/price_drivers/jewelry/ 15. Demand for electronics as a sector (gold is one of many inputs in electronic components, and because there are few, if any, substitutes) http://www.pensions.gold.org/us/price_drivers/industrial/

Political and economic factors of the gold price:

1. U.S. Macroeconomics (ongoing inflationary pressures, the massive U.S. trade deficit ) http://www.blanchardonline.com/gold_as_investment/five_factors.php 2. Low or negative real interest rates – the higher the inflation, the higher the gold price http://en.wikipedia.org/wiki/Gold_as_an_investment#Factors_influencing_t... 3. War,terrorism, invasion, looting, crisis – the bigger the uncertainty, the higher the gold price http://www.pensions.gold.org/us/price_drivers/investment/ 4. Weak dollar http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=24205&sn=Detai... 5. Low real interest rates http://news.goldseek.com/GoldSeek/1186412400.php 6. Price for industrial metals – the lower the industrial metals’ price, the higher the gold price 7. Rising asset prices, and rising bond yields result in growing gold price http://www.forbes.com/feeds/ap/2007/08/06/ap3991860.html 8. Rising oil prices lead to higher gold prices http://www.dailyreckoning.co.uk/article/200420062.html 9. There is a positive relationship between gold price movements and changes in credit risk. http://www.gold.org/deliver.php?file=/rs_archive/rs_32_shortandlongrun.p... 10. Internet growth http://www.wnd.com/news/article.asp?ARTICLE_ID=55079 __________________________
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