Introduction to Online Gold Trading (XAU/USD)
"Gold is money, everything else is credit" - J.P. Morgan 1912
Since the dawn of men history gold has been recognized as a valuable commodity. For thousands of years, Gold served the role of a global currency. Today investing in Gold is still very popular worldwide and that popularity translates to with high liquidity. High liquidity means that the difference (spread) between buyers and sellers is tight and that makes Gold a lucrative financial asset for short-traders, even for day-traders. The gold price is determined by the market on a 24/5 basis. Here is all the essential information to trade Gold.
Important Numbers for Gold Traders
Today only 156,000 tons of Gold are available in all over the world. 2,500 extra tons are mined each year.
Where Gold Came From?
Recent studies have shown that gold came to earth from a bombardment of meteorites that happened during our planet’s final stages of formation, some 4.5 billions years ago. Actually in the same way other precious metals came to earth, such is platinum and palladium. (Source: University of Maryland, College Park, December 10, 2010).
What makes Gold Unique?
Gold is unique due to its durability in time as it doesn't corrode. Furthermore gold can conduct heat and electricity. All these features together make Gold necessary in many modern applications including electronics, micro-conductors, space travel etc. But actually, the demand for Gold is driven by Jewellery as you will be able to see later in this analysis.
Historic Gold Chart
Image: Gold Price historic chart (source: MacroTrends).
Agreements and The Historic Role of Gold
These are the four (4) main International Agreements that were based on Gold and formed the Global economy for several decades.
1. US Gold Standard Act. (1834-1933)
2. Gold Standard Rule (1914-1933)
3. Bretton Woods Fixed Rate System (1946-1971)
4. Washington Agreement on Gold (1999)