Currencies Gold

Currencies Gold and Silver have provided phenomenal investment returns this past decade. To some extent Gold behaved as a defacto currency and stalwart against the US dollars plummeting. Currencies Gold and Silver have also reacted positively as a hedge against deterioration of other global currencies. As a foundation asset Gold is within any long term savings or investment portfolio. Silver at present is Gold's poor cousin but longer term both will perform well and will be used by investors to store wealth and protect assets. Particularly during times of financial stress and the resulting 'flight to quality' for centuries investors have sought to protect their capital in assets which offer safer stores of value. Gold’s stability is a potent wealth preserver and remains as compelling as ever for today’s investor. The best of the few financial assets that do not rely on an issuer's promise to pay are currencies gold and silver. Investing with currencies gold and silver provides a safe haven and refuge from widespread default risk. As such it gives investors insurance against extreme movements in the value of other asset classes. trading education learning forex trading the news trade the news   TradeMiner how to trade currencies

Compelling reasons underpin the widespread renewal of interest in currencies gold and silver as alternative asset classes: Portfolio diversification Most investment portfolios primarily hold traditional financial assets such as stocks and bonds. Diversifying your portfolio can offer added protection against fluctuations in the value of any single asset or group of assets. Risk factors that may affect the gold price are quite different in nature from those that affect other assets. Statistically, portfolios containing gold are generally more robust and less volatile than those that do not. Inflation hedge Market cycles come and go, but over the long term, gold retains its purchasing power. Gold’s value, in terms of the real goods and services that it can buy, has remained remarkably stable for centuries. In contrast, the purchasing power of many currencies has generally declined, due for the most part to the rising price of goods and services. Hence investors often rely on gold to counter the effects of inflation and currency fluctuations. Currency hedge Gold is a hedge against fluctuations in currencies, particularly the US dollar. When the world’s main trading currency appreciates the US dollar gold price generally falls. Whereas a fall in the dollar relative to the other main currencies produces a rise in the gold price. Thus Gold has consistently proved to be one of the most effective assets in protecting against dollar weakness. Risk management Gold is far less volatile than most commodities and equity indices. It performs more like a currency. Assets with low volatility help to reduce overall risk in your portfolio, adding a beneficially to expected returns. Gold also helps to manage risk more effectively - protecting against infrequent and unlikely but consequential negative events referred to often as “tail risks”. Demand and supply The price of gold tracks the shifting balance of supply and demand. Long lead times in gold mining mean production of gold is relatively inelastic, regardless of increases in demand. That’s why the rally in the gold price since 2001 has not engendered a meaningful increase in gold production levels. Demand for gold has shown sustained growth recently, due at least in part to rising income levels in key markets. These supply and demand factors have laid foundations for gold’s most positive outlook in over a quarter of a century.