History has seen that whenever the demand for any asset or item strengthens, the price of that item rises. Conversely, if there is excess of supply of any asset or item, its price falls. The price of gold also generally follows the same notion. When the gold demand increases, it is presumed that its price will rise; more so because there is limited supply of this precious metal.

Presently, gold is primarily in demand especially as not only investors but also the central banks around the world are on its buying spree. There are many factors that will contribute to the behavior of the gold stock price in the year 2013. They are largely dependent on the sentiments in the equities market. In addition, the rate of unemployment has a lot to do with the consumer confidence levels; not to mention, the fluctuations in the value of the U.S. dollar and the condition of the real estate.

Gold jewelry has a lot of takers in a country like India. This form of gold constitutes about two-thirds of the annual gold production. The demand from India constitutes about 27% of the total demand for gold jewelry as it is considered a part of its traditional attire; more so during auspicious functions and weddings. With the ever-growing population, its demand will hardly wane.

The application of gold in the industry is also growing on account of its properties of high thermal conductivity and also because its resistance to corrosion is quite high. The developing nations like China, India and Brazil have a growing demand for this metal. In fact, China is continuously on the move to purchase more and more gold; having stopped the supply of its gold production to other countries and keeping the same for its own future use.

Whenever there is economic instability due to national crisis and unstable government in any nation, the price of gold tends to climb up. As gold is considered as a hedge against inflation its demand increases during such times.

Mining companies that have substantial gold reserves also can effect changes in the gold prices through many ways; viz., selling or buying of gold in immense quantities or even if there is a reduction in the production of gold from their mines.

The central banks can control the price of gold. Investments in gold can lose their appeal if the central banks increase the rate of interest, because then investors would be lured towards purchase of bonds or the national currencies.

In the U.S. the devaluation of its currency with respect to other major currencies in the world spurts the price of gold bullion. Even if the gold rates fall, gold movements can be tracked by speculators through gold futures and options and they can gain potential profits from the same.