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.
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 played an important role in society for centuries. Today, Gold is mainly used in jewelry, dentistry, electronics, medicine, space exploration, and of course… trading.
What is the Gold price
The Gold price is quoted per troy ounce, which is approximately 31.1 grams and expressed in US dollars.
As of now, Gold is trading at $4,090 per troy ounce, meaning 1 gram of Gold is worth approximately $131.45.
What can influence the price of Gold
Currency fluctuations
Currency movements—especially the USD—have a strong influence on the Gold price. In general, there is an inverse relationship between Gold and the US dollar: when the dollar depreciates, Gold prices tend to rise; when the dollar strengthens, Gold prices often fall.
Until August 15, 1971, the value of the US dollar was fixed to gold at $35 per ounce, allowing foreign governments and central banks to exchange their dollars for Gold at that 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 their purchasing power. In such conditions, low interest rates can support higher Gold prices.
Uncertainty
Although broad as a concept, uncertainty—particularly political or economic—can significantly affect the price of Gold. Gold is widely seen as a “safe-haven” asset, expected to retain or even increase its value during periods of market volatility.
For example, the United States holds the world’s largest Gold reserves, with more than 8,100 tonnes.
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Take a look at how to trade Gold on Change: https://youtube.com/shorts/4vNE_OB5tO8?si=n_NqDqAj9f89B3ww
Happy trading!
