Thursday, October 18, 2007

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The price of gold is the subject of much debate at the moment owing to the continuing low value of the US dollar. It is actually an integral part of forex services, as much as any given currency on the open market today. Gold is linked to every single currency as the oldest trading substance, and one that every country around the world recognises in terms of value. Its price has been anything but stable in the last few years, with persistent peaks and troughs making it increasingly hard to predict in terms of forex strategies.
The price of gold actually reached a two-month high in the last week of July 2007, which experts have put down to the fact that the dollar is still falling, but nobody is expecting a surge in value just yet. The fall of the dollar is being managed and cannot be said to be in free-fall as a result, so even though the price of gold is predicted to rise in the coming months, it will not go through the roof as some forex brokers hoped it would!
Although its performance against various world currencies has been erratic in recent month, the future is looking brighter for the precious metal. The price of gold does not just depend on the exchange rates of other currencies and the strength of the economy in various countries; it also depends on its own availability. Various forex services have reported that very few new mines have been found in the recent past and thus there is not as much gold being produced. This in turn makes it rare, so the forex brokers may just get their wish of an increased price in the distant future.
However, gold is still a headache for those learning forex strategies. Affected by the world economy, it had previously fallen by as much as 12% in two months since the beginning of 2007. Although it is rising in value at the moment, it is still too early to say whether that will be sustained or whether the value will fluctuate as the US dollar does. During May, for example, the price of gold fell against the Chinese RMB, rose against the Japanese Yen and Swiss Franc and held steady against the British pound and the Euro. This just serves to prove just how unstable the global economy is at the moment, and with that in mind it is virtually impossible to predict what the price of gold will do over the next few month!
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