Macroeconomic factors means a condition or a specific pattern that relates to a large aspect of an economy. This means it doesn't directly relates to a particular population but an economy. Geopolitical events, inflation, and interest rates could impacts on the prices of gold and silver. Here, I would like to highlight those factors that can effects the prices of gold and silver.
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GEOPOLITICAL EVENTS
The major concern is uncertainty that happens when political unrest starts in the world. Usually, uncertainty circulates in the financial market when a war or conflicts happened. Such geopolitical events push the investors into the world of gold and silver. In this scenario, every investor wants their investment to the safest place which is obviously a gold and silver. This way, gold and silver prices always increased when demands of these precious metals increased a lot. In short, geopolitical events has the biggest impact on the demand of gold and silver and this becomes iconic because every investor want to grab it as much as they can.
INFALTION
Silver and gold has a hedge and store of value against inflation. Gold prices increased to a high value when a dollar falls. This means the paper currency declines when inflation rise and this ultimately pushes the investors to move their investment in precious metals such as gold and silver. So, inflation is the biggest caused to increase the demand of gold and silver which leads to an increment in prices. However, there are many other options which has store of value in such events against inflation such as bonds, real estate, commodities, equities, and few others but gold and silver is beyond all of this that's why investors preferred this over other available options.
INTEREST RATES
It is basically a cost of borrowing money from other bigger institutes to run businesses. This can slow an economic growth when interest rates increased a lot because it becomes more expensive to borrow money. That's how they will be unable to run businesses and ultimately, there will be very less demands of goods and services which results a huge decline in the prices of gold and silver. On the other side of the picture, if interest rates are low, it will be more encouraging situation to borrow money in order to run business that's how demands of goods and services will increase which can be beneficial for boosting an economic growth and this results to an increase demand of silver and gold.
In short, higher interest rates doesn’t affects only economic growth but huge decline in the prices of silver and gold, and lower interest rates could lead to a high demand of gold and silver as well as speedy growth of economy.
I'm winding up this article with a conclusion that gold and silver has a complex relationships which can be influenced by a variety of macroeconomic factors as few of them mentioned above. Investors should be more careful while investing in gold and silver and they should carefully monitor all of the possible impacts that could effects the prices.
