Learn to Trade Forex

07 - Gold (XAU/USD) - Reasons Why Gold is Traded

Typography

As an investment, gold is the most popular of the precious metals

Investors generally buy gold as a hedge or safe haven harbor during economic, political, or social uncertainty (including investment market declines, burgeoning national debt, currency failure, inflation, war and social unrest).

The gold market is subject to speculation as are other markets

The history of the gold standard, the role of gold reserves in central banking, gold's low correlation with other commodity prices, and its pricing in relation to flat currencies during the financial crisis of 2007–2010, suggest that gold behaves more like a currency than a commodity

There are several factors which drive gold up/down:

  • Global inflation
  • War in the Middle East and North Africa
  • Threats to oil supplies
  • Volatility in the forex markets
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