The Gold bounces back again

Gold, considered the metal of Gods in ancient times, continues to shine as bright as always. During these difficult times in world economy, the Gold is one of the commodities that continued to increase its value. Since November, Gold started to lose some weight because was sold heavily.

Things appear to start changing because in the last couple of weeks two major events occurred: China raised it reserve ratio for banks and the Federal Reserve announced a hike in the discount rate for banks. These two events are known to have a great impact over Gold and it’s starting to show. 

China is considered to be one of the world’s biggest Gold buyers, so Chinese financial events can easily influence Gold rates. On the other hand, because Gold is traded in US Dollars, any change in the US financial policy affects Gold rate as well.

The usual response on the Forex market for such a tightening scenario is a downgrade in inflation expectations and another round of Gold selling. This time this scenario didn’t happen. Instead, Gold marked the second week of gain. That is a sign that the Gold could be preparing for a good rebound. If you want to give it a try, Etoro and Ava Fx are two of the best trading platforms where you can trade Gold.