|
When first dipping your toe in the the gold market, it can often appear complicated and confusing. But with a few simple explanations, what at first appears daunting, can soon get you hooked!
Basically gold is measured in troy ounces (XAU) and is traded in pair with the U.S dollar. So when looking at a gold quote, 500XAU/USD would read as one ounce of gold is valued at $500 USD. Essentially as you buy gold you are selling the dollar and vice versa.
The cost of gold rises and falls with the value of the U.S dollar. Due to the current economic situation, where the dollar has fallen significantly, now would be an opportune time to buy gold as the dollar still remains unstable against most currencies.
It is genearlly speculated that the U.S dollar will continue to fluctuate as the U.S attempts to stabilise their housing and financial market by lowering interest rates. This possible further fall in the dollar allows traders to hedge, that is, take managed risks, by investing in gold in the reassurance that future gold prices will increase significantly bringing a very lucrative return for its investors. |