Understanding the Gold Rate: Why Is Gold Valuable and What Causes Its Price to Fluctuate?

Understanding the Gold Rate: Why Is Gold Valuable and What Causes Its Price to Fluctuate. Investors often buy gold as a hedge against inflation because, unlike the US dollar and other forms of federal currency, the amount in gold in circulation doesn’t tend to change much from year to year. So while paper money reduces in purchase value as more paper bills are printed, gold tends to keep its value as its supply remains fairly consistent.