Gold is one of the most widely discussed metals due to its prominent role in both the investment
and consumer world. Gold was also used as the world reserve currency
up through most of the 20th century. Even though gold is no longer used as a primary form of currency in developed nations, it continues to have a strong impact on the value of those currencies. Moreover, there is a strong correlation between its value and the strength of currencies trading
on foreign exchanges.
The gold market
is subject to speculation and volatility as are other markets. Internationally gold price is noted in USD and gold tend to show a inverse relationship to USD.
So when the dollar gets strong, the gold price decreases and when the dollar gets weaker, then the gold price increases.
Although many new large scale gold mines became operational in recent years, the gold production is getting stagnant or low because of fast exploring of easy reserves. Now most of the gold are mined from very deep mines and the production cost is very high. Gold Production is relationship
upon the rate of gold.
Countries like India, China and US are main consumers of gold, mostly as jewelry. The festival seasons, economic growth and investment
preferences of these countries greatly affect gold price
. Gold is the most popular as an investment
. Investors generally buy gold as a way of diversifying risk, especially through the use of futures contracts and derivatives.
This blog is written for Orient Financial Brokers, an online gold trading broker offering online precious metals trading
for traders across middle-east.
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