Every week we provide insights into popular assets and hot questions, so you can easily learn more about the investment market in bite-sized pieces.
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In this Markets in Focus we take a closer look at Gold.

What is Gold

Gold is one of the most popular precious metals and has been an important part of society for centuries. Today, Gold is mainly used for jewelry, dentistry, electronics, medicine, space travel and of course…trading.

What is the Gold price

The Gold price is determined per troy ounce, approximately 31.1 grams expressed in US dollars.

So if Gold is currently priced at $2350 then 1g of Gold is worth $75.55.

What can influence the price of Gold

Currency fluctuations

• These have a strong influence on the Gold price, mainly the USD. In general, there is an inverse relationship between the Gold price and the USD. When the dollar depreciates, Gold prices tend to rise. On the other hand, when the dollar appreciates, Gold prices tend to fall. Until 15th of August 1971 the value of the US dollar was fixed to gold at a rate of $35 per ounce. This meant that foreign governments and central banks could exchange their US dollars for Gold at this fixed rate.

Interest rates

• Gold is often considered a hedge against inflation. When interest rates are low and inflation is expected to rise, investors may turn to Gold as a store of value to protect against the erosion of purchasing power. In this scenario, low interest rates can support higher Gold prices.

Insecurity

• Although this is a very general concept, uncertainty can certainly play a role in the price of Gold, especially political uncertainty. This is partly due to the fact that Gold is generally considered a safe investment. This is an investment that is expected to retain its value or even increase in value during times of market volatility. For example the United States holds the world's largest stockpile of Gold reserves by a considerable margin of over 8100 tons.  

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Take a look how to trade Gold at Change: https://youtube.com/shorts/4vNE_OB5tO8?si=n_NqDqAj9f89B3ww

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Happy trading!

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