Introduction to Precious Metals

When most people hear the words precious metals, Gold will be the first to come to their mind. Gold is used to manage risk it serves as a safe haven for capital during times of financial/political uncertainty. Gold is arguably the most watched and diverse commodity in the world. Beside physical gold, futures contract or paper gold is the simplest way to benefits from the growing demand of the yellow metal.

Factors Influencing Gold Price

A popular forecasting outlook for gold is it relation to the US dollar. Gold is quoted in dollars, usually as 'dollars per troy ounce'. This relationship to the US dollar is an important one and is another factor that will have an influence on the price of gold. If the dollar becomes more attractive to investors and starts to rise, the price of gold will usually drop. In recent years, some people have seen the US dollar as a safe haven for their money and that has reduced the appeal of gold. But when US economic start to show sign of slowing, Gold will again see it demand increases.

Another aspect to weigh up when trading gold: the impact any moves in the dollar will have on the price of gold. For example, if the US central bank, the Federal Reserve, decided to cut interest rates, this would normally weaken the US dollar and lift the price of gold. As with oil, because gold is such a global commodity it pays to keep a watchful eye on the major economic announcements such as interest rates and unemployment figures, which are released on a regular basis. Indeed, gold is a one-of-a-kind commodity with multiple players bringing multiple views and goals. That allows traders to take a position to hedge or profit in ways many other commodities cannot.