Navigating the Gold Market in Forex | FxGrow
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Gold Market English

Gold Markets


It seems that all factors came together to support the prices of precious metals and push them to historical levels. If the demand for gold increases as a safe haven in times of crisis, then the Corona epidemic is the living example of the greatest fears in the world. But if we talk about geopolitical concerns, the tension has intensified between the two largest economies in the world: the United States and China, to go beyond the trade dispute and reach diplomatic tension

The factors behind the rise in precious metals do not stop to this extent. For example, we find the demand to buy gold as a tool to hedge against inflation. In addition to fears of a deterioration in purchasing power after governments and central banks directed to inject financial implementation packages, resulting in an increase in prices in the future. The media's spotlight on precious metals also contributed to encouraging purchase orders and increasing bets as prices continued to rise.

On the other hand, it is considered positive business, as investors and speculators in the gold markets insist that the lack of clarity in the global economic scene makes betting on gold a source of strength and safety in the long term.
Interest in gold has increased after huge investments from global billionaire Warren Buffett. It was announced that BERKSHIRE HATHAWAY   owned by Warren Buffett has acquired 21 million shares of BARRICK GOLD CORP with a market value of $565 million.

The one on our planet came from space through a meteorite that struck the Earth about 200 million years ago and brought with it all the precious metals, and according to their belief, the Earth still stores 80% of gold in its interior. Accordingly, humans used gold as a global currency from ancient times to the present day, as all countries agreed to pay debts and payments in gold as a rule, and it is possible to obtain quantities of gold in exchange for paper currencies from any country or central bank

In the year 1914, the United Kingdom abandoned the gold standard for the first time in its history, which led to a decline in the value of the pound sterling, indicating the strength of the yellow metal and its importance in the economic balance, which forced the Kingdom to reuse gold during the year 1925, only to abandon it in the year 1931. As for The United States abandoned the golden rule in 1933
In the late thirties of the twentieth century, no country remained dealing with the gold cover, either in terms of strengthening the currency or covering debts, but it was used extensively in measuring the real value of the currency. When the value of the currency in a country decreases due to the weakness of the economy, the concerned governments are forced to print more money, and this leads to a decrease in the local currency, then people start buying gold as a means of protecting against inflation risks and saving capital, so gold prices rise due to the increase in demand. As paper currencies have no real value, while gold has a stable and fixed value, especially in light of the political and economic instability, and it is known that gold is priced as a basic commodity in global stock exchanges for nearly 100 years. It is far from the value of the local currency and is not fully and directly affected, as it is considered a safe metal that has its independence and is subject to sale at any time by its holder.

Based on what was mentioned, gold has a major role in the world economy, so it is either a reason for the deterioration of the economy or its improvement. Some investors / individuals, when they sell the dollar as a result of its decline, buy gold futures contracts in return, hoping from the latter to preserve their financial assets. As for the effects that result from the huge debts in some countries as a result of the inability and failure of governments, then gold becomes their last resort, and then the operations of selling gold reserves are adopted in order to obtain sufficient cash to increase the supply in the markets and lower prices.

It is noteworthy that in the past year, minerals had a significant impact on the global financial markets and stock exchanges, especially gold, for which the demand reached 990 tons in the second quarter of the year, and then decreased by 0.07. Global, to return and rise in the first quarter of this year to the level of 1765.0 dollars an ounce, to fall again to the price of 1670.0 in the month of June.

As we know, India and China are the two largest countries that deal with gold in terms of both production and consumption; two weeks ago, gold prices hit record highs at 2074.0. We are now witnessing what is called in the trading language a relaxation in numbers or a corrective movement of the Fibonacci indicator down to the level of 1930.0 1880.0. It is expected that the price of the precious metal will rise again due to the continuous increase in demand in an excess manner, to reach the level of and above per ounce.

As with gold, the same applies to ounces of silver, which were clear buying indicators for the white metal at $17.75 per ounce based on the PARABOLIC system in the charts, bringing its price to a maximum level of 29.80, which is the highest ever in statistics dating back to 1982 supported by investment and industrial demand. To go back and fall to the level of 23.40 with a Fibonacci movement. Reports indicate that the silver market prices will record high numbers around $30.00 and above at the end of this year.

These gains in prices came after many traders in the stock market achieved many profits, coinciding with the decline of the US dollar under the pressure of a campaign of successive and weak US data, and the sweeping invasion of the Corona virus and the inability to control it.
As for the rest of the metals, such as platinum, its price rose to 2419.10, palladium and 2993 copper.

Finally, gold was and will remain a means of saving and an important source of liquidity and hedging, as it is considered a basic indicator whose prices determine the course of the entire global economy.



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