Forex Factors that influence the price of gold

[FXOchartist]

In society, gold is one of the precious metals that is much sought after because its intrinsic value is not damaged by time. In forex trading, gold has the symbol XAUUSD which has high price volatility and is very liquid, so many traders are interested in trading gold which can be traded on MT4,MT5, or FXOpen Ticktrader platforms. Gold is often one of the instruments included in the most traded asset category.

So what are the factors that influence the price of gold? The following information may be useful for those of you who like trading gold in the forex market.

Inflation

Inflation is a condition that causes the prices of goods to increase, including the price of gold. It has been proven over time that the price of gold is resistant to inflation. When inflation is high, many investors choose gold as a safe haven asset

Monetary policy

Gold prices are also influenced by the monetary policy taken by the United States central bank, The Fed. Monetary policy is the policy of increasing or decreasing interest rates. The Fed's interest rates are falling, making the price of gold have the potential to rise. This is because the dollar is no longer attractive as an investment option and people choose to invest their money in gold.

Supply and demand

It is an economic law that if supply increases the price will fall and vice versa, when demand increases the price will rise, and that also applies to gold.

Global conditions

When global conditions are full of uncertainty due to recession, war can affect gold prices because investors will choose safe haven assets including gold

United States (US) dollar exchange rate

Domestic gold prices refer to international gold prices that use the USD as a conversion standard against other currencies. When the USD value strengthens, the gold price tends to weaken, conversely, if the USD strengthens, the gold price actually weakens.

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[Holicent]

Inflation is just like a sickness that can affect any type of asset or investment whatsoever. We should read into economic status before making any investment. Increasing or decreasing interest rates too which is part of the monetary policy made by the US too can affect the safe haven assets. In addition, supply and demand is like a constant, it has effect over any commodity.

 

[FXOchartist]

Inflation is just like a sickness that can affect any type of asset or investment whatsoever. We should read into economic status before making any investment. Increasing or decreasing interest rates too which is part of the monetary policy made by the US too can affect the safe haven assets. In addition, supply and demand is like a constant, it has effect over any commodity.

It's true, inflation can have an impact on financial markets and affect many asset classes including gold. Apart from that, it is important to always follow updates on interest rates, especially the Fed, changes in interest rates made by the American central bank can affect global financial markets.