Gold plays an important role in the financial market, being a profitable instrument for generating income. Metal has long acted as money, but after World War II the emphasis shifted to fiat currencies. Despite this, gold is ahead of a number of assets and remains a popular option for investment.
Gold is ahead of global market trends
Like a few centuries ago, many people transfer their savings to gold, and it is still in high demand. But the metal also has a drawback: the instability of the rate and the inability to derive regularities of its dynamics and all factors that affect this process.
World-renowned experts are not in a hurry to make predictions about trends in the gold market, because the situation may change drastically. Such features of the metal do not reduce its popularity as a valuable asset. It is obvious that the current situation will not change in the near future, which means that the market will develop.
Physical gold refers more to fiat currencies than to industrial metals. Proof of this is long storage without active use and unclaimed for production purposes. In addition, the fluctuations of its rate are influenced by factors that determine the situation in the currency market: the state of the economy and interest rates. While the cost of raw materials of different types is established taking into account its stocks, technical characteristics and markups.
Recently, there has been a correlation between gold and palladium, the cost of which has decreased significantly. This situation has arisen due to the complex relationship between the U.S. and China, which has led to a decrease in supplies of industrial metal. Experts predict that the observed correlation will not last for a long time and soon gold will return to independence, and the dynamics of its rate will be affected only by supply and demand.
Precious metal is an excellent option to save money in times of market instability. Its value is regularly growing, which is attractive for investors. Such peculiarity of an asset makes it possible to assess its importance not as an instrument of dividend yield and capital growth, but also from the point of view of a factor that affects the economy, the situation in the world market and liquidity.
The intention to buy gold implies deep analysis not only of its current value, but also consideration of possible risks in the world market.
The advantage of investing in metal is that its price increases when there is a decline at stock exchanges and the assessment of the economy changes. In other words, when the stock price is going down, the gold price is going up. This factor increases the attractiveness of the metal as a means of saving.