The Gold Dollar Value
When it comes to the gold dollar value, more than anything else, gold seems to follow the US dollar regardless of any other circumstances. The gold standard was abolished by President Nixon in 1971 and 1973 and officially, the IMF abolished gold as part of the money system. As the Dollar goes down, traditionally, gold would move up. These days, however, the same pattern does not hold true. Instead, gold seems to move up with the Dollar. In other words, gold seems to recently been acting more like currency than a precious metal, so to speak. When it comes to the gold dollar value, investors can protect their wealth by diversifying their portfolio particularly when most of the main currencies including the Yen, Euro and Dollar fluctuate in value.
In recent years, the Dollar has been losing value and has in fact lost ninety six percent of its value since the FED was created. Since the Dollar is the world’s most common currency of the reserve, investors hope that the Dollar’s value becomes much more stable. Behind the scenes, however, there is just too much confusion about what will happen to the value of the Dollar and how this will affect the future.
Smart investors believe that investing in gold today will keep producing secure and good returns as the demand for investments and retail globally pushes the gold dollar value towards new heights.
As a matter of fact, gold happens to be the most popular investment of all the precious metals. Generally, investors purchase gold as a method of risk diversification particularly through the use of derivatives and future contracts. The market for gold is subject to volatility and speculation as are other markets. Compared to other investments in precious metals, gold has the most effective hedging properties and safe have across the globe.Throughout history, gold has been used as money and for currency equivalents, has been a relative standard specific to economic countries or regions.
The price of gold, like many commodities is driven by demand and supply. Unlike other commodities, however, a larger role that affects the price of gold rather than its consumption is disposal and saving. Since the gold stored in quantities above ground is great compared to its yearly production, Comex gold prices are affected mainly by demand and sentiment rather than supply or changes in the yearly production. For this reason, gold can be used as a hedge against currency devaluation, deflation and inflation, just like all precious metals. This is unlike the major currencies that are undergoing stress and pressure due to massive deficits of the government.
