XAUUSD(Gold spot (500 oz)). Forex quotes and online charts.
XAU/USD. Main features
Gold can be called the king of the precious metal market. It has remained in demand for many decades. Read more...
XAU/USD. Main features
Gold can be called the king of the precious metal market. It has remained in demand for many decades. Sometimes the prophets of gloom and doom forecast a sharp fall in gold but these are just predictions. Gold is still the most stable and popular trading instrument.
In many countries, gold is still used in settlements. The world's leading countries hold gold bullion in their gold reserves.
On this page, you can see the gold spot price in real mode on the London Metal Exchange. Taking into account the US dollar-to-gold ratio, you will be able to grasp whether it is worth investing in this instrument or not.
What impacts gold price
As a rule, there are several factors that influence the gold price:
- Supply/demand
- The size of gold reserves in a particular country;
- Breaking fundamental news and central banks’ announcements;
- Natural disasters;
- High correlation with the US dollar (if the greenback loses momentum, gold starts rising).
Main perks of gold investment:
- Gold is a safe-haven asset. When national currencies depreciate, investors are prone to invest in gold.
- Gold is a highly liquid asset. It is always in demand, and traders can quickly sell it at the market price.
- Gold is considered a universal currency that has intrinsic value relative to the national currency of any country.
Drawbacks of gold investment
Naturally, there are some disadvantages even though they are insignificant. The main one is that its price may be stuck in the narrow range for a long time. Gold is not the most profitable asset. If US stocks have grown by 8% (statistics for 1926-2018) in 40 years, gold has advanced by 3-3.5% over the same period of time (statistics for 1979-2019).
How to buy gold
- Purchase gold bullion in large banks. A significant disadvantage of this method is that you will have to take care of the safe storage of the precious metal (for example, rent a deposit box in a bank);
- Buy gold coins in banks or from specialized firms. Requirements for coins are extremely high: any chip or dent on the surface of a coin significantly reduces its price.
How to invest in gold. Trading on exchange
Here are the main ways of investing in gold:
- Buy shares of gold mining companies;
- Find a mutual investment fund (a company that buys gold or derivatives with investors' funds) and purchase mutual fund units;
- Invest in exchange-traded funds (ETFs);
- Buy futures – financial contracts obligating the buyer to purchase an asset or the seller to sell an asset at a predetermined future date and price.
As you can see, there are many ways to invest in gold. However, when buying this metal, remember that returns may be small. However, this minor disadvantage outweighs the main advantage of gold being a safe-haven asset.
In our opinion, it is wise to invest part of the capital in gold and count on a long-term profit.
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