Learn

Gold Trading

Gold trading – what affects the price of gold

Gold has long been a popular trading instrument.

Compared to even our current currency, gold has an intrinsic value and, at the same time, it is a commodity traded in several markets.

Gold trading – historical background

1792 is marked as the time of the most important movements for the gold coin. Just under two centuries later, in 1971, President Richard Nixon brought the United States out of the gold standard, and economic changes dramatically affected the price of gold in the world.

On January 21, 1980, gold prices climbed $ 35 an ounce to $ 850 an ounce, or $ 2,398.21 after adjusting for inflation. On March 19, 2008, gold peaked at $ 1,022.40.

CFDs on gold and factors affecting the price of gold

Of all precious metals, gold is the most valued investment and is generally bought as a risk diversification method, including through the use of futures and derivatives. As in other markets, gold on the exchange is subject to significant .

The price of gold is also influenced by supply and demand, but unlike most commodities, the economy and gold stocks are more influential than consumption.

Given the huge amount of gold produced throughout the year, trading in spot metals is profitable because the price of gold depends primarily on changes in demand, rather than changes in annual production.

According to the World Gold Council, in recent years, the annual production of gold has been around 2,500 tons. Of this amount, 2,000 tonnes are used in jewelry or industrial/dental manufacturing, with the remainder for retail investors and exchange-traded funds.

The price of gold on the exchange – what influences it?

CFDs on Gold and central banks

The cost of gold is closely related to interest rates: as interest rates rise, the price of gold, which is not profitable, tends to decline, and vice versa.

As a result, the price of gold can be correlated with the central banks according to the monetary policy decisions they make in accordance with the interest rates.

The value of gold on the exchange hedging against stock market crashes

Like all other precious metals, gold can be used as a hedge against inflation, deflation, or currency devaluation.

Gold Trading – Jewelry and Industrial Demand

Jewelry still accounts for over two-thirds of the annual gold demand, with India being the largest consumer by volume, followed by China and the United States.

Industrial, dental, and medical uses account for about 12% of the demand for gold, as this metal has high thermal and electrical conductivity.

In recent years, jewelry processing has grown into a multi-million dollar industry. People can make money by selling old or broken jewelry to local gold buyers or online.

War, natural disasters, and other factors affecting the price of gold

When dollars were converted to metal by the gold standard, they were considered money, but most still preferred to use paper bills. Many feared bank failures and did not use them.

This situation arose in the United States during the Great Depression of the 1930s, which led to President Roosevelt declaring a national emergency and issuing Executive Order 6102 “Banning the Storage of Gold Coins, Gold Bars, and Gold Certificates in the United States.”

Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

Welcome to the World of Trading

Find out why millions of traders and investors use the services of FinaceWorld.io

Trading Signals

Subscribe to trading signals and get instant notifications when enter or exit the market.

Hedge Fund

Automate your trading with our superb Copy Trading Solution.

Related articles

Might be interesting

**Excerpt:** "Assessing Google's market position for strategic growth." **Meta Description:** Explore strategic investment approaches for Google shares from 2025 to 2030. Analyze market trends, strengths, and future growth opportunities for
Login To Pro Account to Get Notified With Closed Deals Too.
Symbol Type Open Time Close Time Open Price Close Price Profit
FR40BUY2025.04.01 00:00:11Only PRO7,801.207,798.91-0.03%
ABBVBUY2025.03.28 13:40:18Only PRO202.69202.41-0.14%
PGBUY2025.03.21 13:40:10Only PRO168.00167.74-0.15%
XAUUSDSELL2025.03.19 01:06:20Only PRO3,029.5423,030.885-0.04%
ADBEBUY2025.03.18 16:16:46Only PRO389.83389.55-0.07%
ABTBUY2025.03.18 13:40:11Only PRO128.44128.02-0.33%
CSCOBUY2025.03.17 15:33:25Only PRO60.2460.13-0.18%
COSTBUY2025.03.17 13:40:26Only PRO904.80907.430.29%
VBUY2025.03.14 16:00:01Only PRO332.17332.07-0.03%
LLYBUY2025.03.14 16:00:00Only PRO810.93810.22-0.09%
LLYBUY2025.03.14 16:00:00Only PRO810.93835.793.07%
MABUY2025.03.14 13:41:14Only PRO523.31522.99-0.06%
UK100BUY2025.03.12 08:02:39Only PRO8,518.158,513.71-0.05%
NFLXBUY2025.03.11 13:40:00Only PRO880.43878.56-0.21%
NFLXBUY2025.03.11 13:40:00Only PRO880.43960.989.15%
AAPLBUY2025.03.06 14:41:46Only PRO235.24235.260.01%
EURUSDSELL2025.03.06 12:00:01Only PRO1.079891.079910.00%
GBPUSDSELL2025.03.06 09:00:17Only PRO1.288651.28888-0.02%
EURJPYSELL2025.03.06 08:00:05Only PRO160.263160.1830.05%
WMTBUY2025.03.05 20:24:22Only PRO96.1496.05-0.09%
HDBUY2025.03.05 20:00:01Only PRO384.66384.46-0.05%
ORCLBUY2025.03.05 16:00:01Only PRO158.64158.18-0.29%
NVDABUY2025.03.04 18:12:16Only PRO117.38117.19-0.16%
TSMBUY2025.03.03 16:00:20Only PRO178.20177.82-0.21%
TSMBUY2025.03.03 16:00:20Only PRO178.20181.381.78%
AUDUSDBUY2025.03.02 22:05:07Only PRO0.622140.62062-0.24%
AUDUSDBUY2025.03.02 22:05:07Only PRO0.622140.635082.08%
METABUY2025.02.28 15:58:14Only PRO663.42663.680.04%
USDCADSELL2025.02.28 15:02:28Only PRO1.441.44-0.04%
USDCADSELL2025.02.28 12:00:00Only PRO1.441.44-0.01%
USDCADSELL2025.02.28 12:00:00Only PRO1.441.44-0.09%
AVGOBUY2025.02.26 16:00:00Only PRO210.83205.65-2.46%
JPMBUY2025.02.26 15:53:19Only PRO261.02260.48-0.21%
BACBUY2025.02.26 14:40:00Only PRO44.0244.110.20%
BTCUSDBUY2025.02.26 04:00:00Only PRO88,857.1384,035.66-5.43%
US500BUY2025.02.25 20:00:10Only PRO5,972.435,928.73-0.73%
WMTBUY2025.02.25 14:51:45Only PRO95.2095.16-0.04%
WMTBUY2025.02.25 14:51:45Only PRO95.2097.982.92%
HDBUY2025.02.25 14:40:09Only PRO392.02390.64-0.35%
HDBUY2025.02.25 14:40:09Only PRO392.02394.160.55%
USDJPYBUY2025.02.24 04:00:00Only PRO149.17149.14-0.02%
AMZNBUY2025.02.19 19:37:22Only PRO225.70225.67-0.01%
GOOGLBUY2025.02.10 20:00:01Only PRO186.62186.42-0.11%
MRKBUY2025.02.07 16:00:00Only PRO88.1888.02-0.18%
MRKBUY2025.02.07 16:00:00Only PRO88.1891.363.61%
TSLABUY2025.02.07 14:40:28Only PRO374.89375.220.09%
USDJPYBUY2025.02.07 04:00:00Only PRO151.59151.54-0.03%
USDJPYBUY2025.02.07 04:00:00Only PRO151.59154.421.87%
XAUUSDSELL2025.02.05 20:02:02Only PRO2,862.2692,862.919-0.02%
XAUUSDSELL2025.02.05 20:02:02Only PRO2,862.2692,882.034-0.69%
MSFTBUY2025.02.03 20:00:00Only PRO413.56413.25-0.07%
BTCUSDBUY2025.02.03 15:24:27Only PRO97,981.8897,939.03-0.04%
BTCUSDBUY2025.02.03 15:24:27Only PRO97,980.0598,047.030.07%
AVGOBUY2025.01.29 20:00:01Only PRO206.29205.82-0.23%
AVGOBUY2025.01.29 20:00:01Only PRO206.29227.2110.14%
NVDABUY2025.01.28 20:00:00Only PRO127.52126.90-0.49%
NVDABUY2025.01.28 20:00:00Only PRO127.52132.914.23%
XAUUSDSELL2025.01.22 23:40:27Only PRO2,754.0832,754.418-0.01%
XAUUSDSELL2025.01.22 23:40:27Only PRO2,754.0832,739.6590.52%
MCDBUY2025.01.16 20:13:17Only PRO279.31279.25-0.02%
MCDBUY2025.01.16 20:13:17Only PRO279.31283.121.36%
NVDABUY2025.01.15 14:40:00Only PRO132.67132.770.08%
NVDABUY2025.01.15 14:40:00Only PRO132.67136.432.83%
VBUY2025.01.14 14:42:23Only PRO308.83308.64-0.06%
VBUY2025.01.14 14:42:23Only PRO308.83317.782.90%
BABABUY2025.01.13 20:19:42Only PRO80.8080.67-0.16%
BABABUY2025.01.13 20:19:42Only PRO80.8084.845.00%
AAPLBUY2025.01.08 15:13:10Only PRO241.77241.18-0.24%
AAPLBUY2025.01.08 15:13:10Only PRO241.77242.860.45%
MABUY2025.01.08 14:40:11Only PRO515.38515.03-0.07%
MABUY2025.01.08 14:40:11Only PRO515.38525.311.93%
ADBEBUY2025.01.06 16:38:17Only PRO434.37434.04-0.08%
ADBEBUY2025.01.06 16:38:17Only PRO434.37451.343.91%
TSLABUY2025.01.03 16:00:00Only PRO387.36386.87-0.13%
TSLABUY2025.01.03 16:00:00Only PRO387.36427.9010.47%
MSFTBUY2025.01.03 14:40:00Only PRO422.72421.96-0.18%
MSFTBUY2025.01.03 14:40:00Only PRO422.72428.321.32%
GBPUSDBUY2025.01.03 14:02:19Only PRO1.239881.23971-0.01%
GBPUSDBUY2025.01.03 14:02:19Only PRO1.239881.241280.11%
EURUSDBUY2025.01.03 08:00:07Only PRO1.028221.028290.01%
EURUSDBUY2025.01.03 08:00:07Only PRO1.028221.031320.30%
COSTBUY2025.01.02 14:40:13Only PRO919.46919.04-0.05%
COSTBUY2025.01.02 14:40:13Only PRO919.46928.771.01%
0