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Don’t Give Up on Gold Just Yet


Industrial metals and commodities shares have been dropping in recent times according to some recent market statistics. Most importantly is Gold which has seen a drop in not seen since early 2000s. As at today, most people have turned away from gold and investing in gold is now termed a fools investment owing to the all time low drop in prices of gold. However, even though, gold is down at the moment, there are people who think there is an opportunity to invest in it as there is a certainty that the values of gold will rise again.


Since the month of March, the price of Gold seems to have been dropping continuously even as the US dollar keeps appreciating. In fact, it now looks like any increase in the interstate rate in the US strengthens the US dollar leading to more fund drainage from metals and commodities.


It shouldn’t really be a surprise about what is happening to gold at the moment. It is has been known that the US Dollar and gold have always been at the opposite end therefore the dropping the price of gold just signifies the strength of the US currency which has opened up opportunities for trading as against trading in commodities.


There are several reasons for this slump. In the first place, there seem to be an overestimation of the amount of gold that is held by China. Unfortunately, the size of 6 million tons is not really enough as expected and the knowledge of this situation is what has plunged the price of gold. Besides, another top gold demanding country which is India decreased their demand for gold last year and this also contributed to what gold is experiencing at the moment.


The value of gold has kept decreasing despite the major holidays which normally increase the need for gold in India and China. Also, the Greek situation has also played a part as uncertainty of the Euro paved way for the Dollar to rise as more and more investors shifted their currency holding to the dollar.
There is a belief that gold will bounce back real soon even though it currently stands at 1.3% to 96. For example, investors are still advised to hold off their gold for a little longer until the rate begins to find their normal placement.


It is important to note that despite all these, gold is still regarded as a “safe haven” especially for long term investors as a hedge against recession and inflation. Gold remains the only way wealth has been measured from generations to generations despite crash in global economy at some point. It is not being used in our daily transactions but its importance to the global economy cannot be over emphasized.
However, it is envisaged that a time will come when investors will not just look at buying the market gold but also start buying the physical gold as a long term investment. Should it get to this point, it is certain that gold prices will hit the roof again.

 

 

WB2017051                                                                                                                                                                                                                                                                                  Publisted 16/01/17


 

 

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The USD/CAD is a currency pair which stands for United States Dollar/ Canadian dollar. It is one of the different currency pairs traded on the forex market. The pair simply means the amount of Canadian dollars required to get a US Dollar. It also means that the Canadian Dollar is regarded as the counter currency while the US Dollar is the base currency and this is the same pattern for any other currency pair.
It is important to note that many forex and economic experts refer the USD/CAD pair as a “Loonie” and this is as a result of the loon found at the rear of the Canadian dollar. Because raw material is what mostly makes up the export base of the Canadian economy, the CAD is normally regarded as a commodity currency.

General Facts and Information
The seventh most traded currency pair in the world is the USD/CAD. There are 3 commodity currencies traded in the world of which the CAD is one of them because natural resources remains the most exported item from Canada. However, note that the Canadian economy depends on the Gross domestic product per capital.
The country Canada is one that is very rich in natural resources which include natural gas, oil and timber. As a result, the strength of the Canadian Dollar will likely be affected by abiotic factors like soil and weather.
Another thing to note about the USD/CAD pair is that it’s importance is also heightened based on the fact that Canada and USA are close neighbors. Due to the close proximity of the two countries, the trade and currency of each of them are linked together. In fact, in some cases, like economic and political factors, both currencies find themselves complimenting each other.

Factors that Affect USD/CAD Pair
There are many factors that tend to affect this currency pair of which interest rate is top of them. Apart from the interest rate, the relationship between the USD/CAD is interesting. For example, a situation where the value of the CAD is rising, the implication is that the export from the country will likely decline and this would affect the economy of Canada. Also, since oil is one of the most important exports of Canada, any change in demand for oil will likely weaken the Canadian dollar.
It is also important to note that since the United States share a very active and physical trading partnership with the US importing from Canada massively, it then means that any issue on the trading practices of one will likely affect the other. Then there is an issue of climate change and natural disasters which impact heavily on Canada export and that is why the USD/CAD pair is seen as uncertain.
However, the USD is also affected by a lot of factors. They include GDP, labor markets, FED decisions etc. In all, the USD is regarded as safe when the factors that tend to affect the US are kept under control.
In all these, the USD/CAD pair is welcomed by traders as they trade heavily on it on daily basis increasing its volatility and liquidity.

Trading on News
Currency trading news shows the direction of the market that go a long way to provide some data for traders who use it to prevent major loses. It is important to be up to date with news and events, economic indicators and other necessary information which tend to affect the forex market.

WB2016034                                                                                                                                                                                                                                                                                             Publisted 23/12/16

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