Among the main factors determining gold prices are: Geopolitical tensions and uncertainty - Political uncertainty, and/or instability is probably the single most influential factor determining the price of gold. Not knowing what will happen to political, social and economic realities has a psychological effect on day traders who hope to profit from changes in gold and other financial instruments. Monetary policies of leading economies - particularly US Federal Reserve and People's Bank of China which are the central banks of the world’s two largest economies. Central banks affect global gold markets by purchasing and selling gold bullions in an effort to balance the country’s payments system, and to stabilise their currency’s exchange rate in relation to other foreign currencies (Forex). Supply and demand - within the commodity markets on which precious metals are traded as futures and on spot markets. Supply and demand of gold correlates to their availability in nature (discoveries) and expected value as an exchangeable commodity.