Proactive investorsLogo Proactive Investors UK Website

Search field

1 year chart

digital-look imported chart image

1 day chart

digital-look imported chart image
Epic & Msn data
Epic GOLD
Time:
Mid Price: 1064.00
Change Today: 6.00 Ascending
Change % Today: 0.57 Ascending
Fifty Two Week High: 1212.50
Fifty Two Week Low: 870.25
Market Capital: 0.00
Period & price data
Period Price
Now: 1064.00
3 Months ago:
6 Months ago:
1 Year ago:
Additional information
Additional Information
Market: LME
Sector: General Mining - Gold
Epic: GOLD
News: Latest news
Web Site: GOLD
Other Articles: 09-02-201008-02-201008-02-2010

GOLD

Gold is a chemical element with the symbol Au and the currency code is XAU. It is a highly sought-after precious metal which, for many centuries, has been used as money, a store of value and in jewelry. The metal occurs as nuggets or grains in rocks, underground "veins" and in alluvial deposits. Modern industrial uses include dentistry and electronics, where gold has traditionally found use because of its good resistance to oxidative corrosion.

Monday, November 23, 2009

Gold continues to climb as US dollar weakens overnight in Asian trading

company news image

Gold continued to rise overnight in Asia, advancing towards US$1,170 per ounce as the US dollar index fell almost 0.75% as investors continued to raise concerns over the status of the dollar as the world’s reserve currency. The gold price has risen from around $750/ounce twelve months ago driven primarily by growing fears over inflation and specifically the decline of the US Dollar.


The relationship between the US Dollar and the gold price is one of the longest standing principles in the global economy. The gold price and the US Dollar has a directly inverse relationship, typically a fall in the dollar will prompt an increase in value for gold and vice-versa.


There are two primary factors that govern this relationship. Firstly like all major commodities gold is primarily priced in dollars therefore a weaker dollar increases the inherent value of the commodity particularly for investors outside the US. For example as the value of the dollar declines against the Euro, someone investing in gold with Euro’s would be able to buy more physical gold per Euro invested.


The second and perhaps the most crucial factor relates to international reserves. All nations, through central banks, store a proportion of their wealth in a ‘reserve’, which exists to protect the relative value of the economy’s wealth.

Whilst there is some level of diversification, economic reserves are primarily held in US Dollars and a combination of other assets including Gold and other major international currencies.


In general terms the world’s primary reserve currency is used as the ‘international currency’ with most subsequent currencies ‘pegged’ against relative value against the reserve currency. Historically reserves were principally held in gold, however since the ‘gold standard’ was removed in 1973, currencies and specifically the US Dollar have increasingly taken precedence.


So with the US Dollar suffering some of the heaviest devaluation for several decades, the gold price continues to gain support as investors and central bankers, sell dollars and buy gold due to perceptions of greater stability in the physical asset against volatile currency markets.


Recent market commentary and analyst opinion has been mixed in reference to the immediate outlook for the gold price, considering the substantial rally over recent months. Some are predicting a short term dollar recovery which will pressure any further gains while elsewhere others have more bullish views for future gold prices, with some considering $1,200 gold in 2009 as a real possibility.

NewsNow icon AddThis Feed Button
Register here to be notified of future GOLD articles.

Other GOLD articles

More articles ►

Other GOLD news

More news ►

Investors interested in GOLD recently viewed


No investment advice

The Company is a publisher and is not registered with or authorised by the Financial Services Authority (FSA). You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.