For the past few years, gold prices have been in a long-drawn-out decline from their all-time high of over $1,900 per ounce. It is estimated that gold prices will be under downward pressure due to the strengthening US dollar.
Gold prices are expected to remain under downward pressure due to the strengthening US dollar. The US dollar reached parity with the euro on August 1, and the euro is stronger. Due to the stronger euro, interest rates (as a percentage of 10-year bonds) in Europe are usually about 1% higher than in America; however, with the weakening US dollar, Europe’s interest rates are lower than America’s.
The euro has strengthened to all-time highs of above $1.58. Currently the euro is at $1.56, an increase of over 10% since April. The strengthening US dollar is largely due to falling Asian currencies against the dollar, particularly Japan’s yen and China’s yuan, which are falling against the dollar. Traders generally exchange high-profit currency pairs such as euros for low-profit ones such as dollars in order to rebalance their portfolios; consequently, the US dollar has been strengthening against most other currencies.
Gold prices:
Gold prices are under downward pressure. Source: Kitco.com, for example, the price of gold is $1,835 an ounce. Based on this, gold prices will be under downward pressure due to the strengthening US dollar.
The price of gold is expected to remain under downward pressure due to the strengthening US dollar. Source: Kitco.com, for example, the price of gold is $1,835 an ounce. Over time, as the dollar strengthens, gold prices will be under downward pressure.
What is the difference between “gold prices” and “the price of gold”? An ounce of gold does not have a fixed value. Gold prices are determined by markets. In other words, the financial value of gold is the value that the market determines. The price of gold is the actual market price at any given time. If you want to buy an ounce of gold, you should know what the market price is, not what its “price” is in dollars or yuan.
What are the fundamentals?
Since gold and silver have a long history of use in coinage, jewelry and as industrial resources, their prices are influenced by a wide array of factors beyond simple supply and demand. For example, if the US dollar weakens against gold, some countries may introduce more restrictions on importing gold, which may affect its price. The value of certain currencies such as the yuan can also affect gold prices. Gold is an asset that you can hold in a safe place and spend again at any time; silver is not as liquid an asset. There are many other factors that affect its value as well, so be sure to research these before you invest in them.
Why is gold under pressure?
The United States has the most powerful economy in the world. The US dollar has been strengthening against most other currencies since 2007. Some experts predict that in 20 years’ time, the US dollar will be trading at 1/5 its current value. If that happens, gold prices will fall to $200 an ounce. This is why gold prices have been under pressure recently.
Source: Kitco.com, for example, the price of gold is $1,835 an ounce. Over time, as the dollar strengthens, gold prices will be under downward pressure.
What is the euro?
The euro is a currency that circulates in Europe. The euro’s value was fixed to the dollar at 1 euro = $1.44 on 1 January 2002, and it became fully convertible in 2002. On 1 January 2007, the ECB took over the role of issuing banknotes and coins and banks’ responsibility for setting the value of deposits denominated in euros; this has been implemented since June 2008, after most European countries had already introduced the euro as their official currency. Today, there are 19 countries that use the euro as their official currency (see Eurozone). There is a single monetary policy for all the countries using the euro, but each country has its own interest rates. For example in certain countries such as Germany, interest rates are lower than in other countries such as France.
What is the “bull case” for gold?
The “bull case” for gold is when it starts increasing in value again. A large number of investors around the world are bullish on gold right now because they see it as a safe investment over time. However, there are many other factors that affect its value as well, so be sure to research these before you invest in them.
