XAUUSD (GOLD vs US Dollar). Exchange rate and online charts

Gold

Gold and money have been related for centuries. This precious metal has always been highly praised in the world market and across cultures, showing off wealth and prosperity of its owner.

Numerous countries still use gold as the base for their monetary settlements. Today, the world’s leading economies keep varying proportions of gold in their foreign exchange reserves.

Live gold prices - the current exchange rate of gold on the London Metal Exchange - are featured on this page. Knowing the rate of gold to the US dollar will help you understand whether gold is worth investing on Forex.

What drives gold prices

There are several factors that determine the value of gold:

1. demand/supply
2. the size of the nation’s foreign exchange reserves
3. news from around the world and the leading central banks
4. natural disasters
5. correlation between gold and the US dollar (when the greenback weakens, gold rises in value)

Notably, these factors can have a simultaneous effect on the price of gold.

Benefits of investing in gold:

1. Gold is a safe-haven asset: when national currencies depreciate, investors prefer to invest in gold for the time of a crisis.
2. Gold is liquid: the precious metal is always in demand, and the trader can quickly sell it at the market price.
3. Gold is a universal currency with an intrinsic value in contrast to national currencies.

At the same time, investing in gold has its disadvantages. Its main flaw is price stagnation. Gold as a precious metal is not the most profitable asset. If the average US stock market return increased by 8% in 40 years (1926-2018), then gold had average returns of 3-3.5% for the same period (1979-2019).

How can you buy gold?

1. You can purchase gold bullions in large banks. The main drawback of this method is that you will have to take care of a safe place to keep the precious metal. For example, you can rent a safe deposit box in a bank.
2. You can buy gold coins in banks or in specialized firms. Strict requirements are imposed on coins: any chip or dent significantly reduces their value.

Investment in gold: exchange trading

There are several ways to invest in gold by means of exchange:

1. to invest in shares of gold mining companies
2. to find a mutual investment fund (a company that buys gold or derivatives with investors' funds) and purchase its shares
3. invest in an exchange-traded fund (ETF)
4. to issue futures, i.e. financial contracts that obligate the buyer to purchase a particular asset from the seller at a predetermined price.

Clearly, there are many ways to invest in gold. Even though the precious metal is not the most profitable asset, it is definitely a reliable one. Therefore, it is more than reasonable to invest part of your capital in gold and expect long-term profits.