Gold is an enigma. Certainly, gold has practical applications. It conducts electricity, does not tarnish, can be drawn into wire and hammered into thin sheets.
However, it is the perceived value of the metal that drives the price. Additionally, there is a "finite" amount of gold available at any given point in time. You cannot take your gold seeds, plant them in the spring and plan for the autumn harvest. If you have mined the metal, you have it on hand. The straightforward laws of supply and demand will be a key factor in dictating price.
The world's appetite for the precious metal has strengthened. According to figures obtained by BizVibe, global gold production surged from just 1,518 metric tons in 1917 to 3,169 tons in 2016. Meanwhile, global gold demand was estimated at $127 billion in 2016.
China has been the largest gold-producing country in the world since 2006. Today, China accounts for over 15 percent of global gold production. Australia is the world's second-largest producer of gold with 270 metric tons of gold produced in 2016. Russia is in third with a total gold output of 250 metric tons in the same year.
With a relatively static supply and growing demand, what are the main factors that drive the price of gold?