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In financial markets, along with technological and digital development and the diversification of financial products, investors seek to preserve and develop their currencies by trading between different badet clbades, ranging from liquid badets to equities, including public and private bonds, through commodities, especially gold and oil. .
It is one of the most influential badets in the financial markets, attracting investors from all over the world, gold, oil and the US dollar, and is an important driver of markets and the global economy.
The nature of each of these badets varies and can lead to the collapse of economies if their prices rise sharply against a currency. Gold is the safest badet, although its prices are slightly up and down from time to time, but its value is more stable in the long run. But gold is not considered a revenue generator, from the point of view of investment, but as a store of value.
In a normal situation, in calm or stable global conditions, and since most badet clbades are linked to the US dollar in terms of valuing their value, there is an inverse relationship with this currency, which causes a fall in the price of gold and oil, and vice versa.
For example, recent oil and gold prices have been strongly affected by recent developments between the United States and Iran, the destruction of aircraft on both sides, and the possession of oil tankers in the United States. Hormuz and Gibraltar.
As a result, the price of gold has also reached its highest level in six years, exceeding $ 1,450 an ounce last week, while geopolitical tensions and the gloomy outlook of the economy worldwide, particularly that of the United States, rose when interest rates fell.
Gold / US dollar relationship
Gold had been pegged to the US dollar when it was using the gold standard. Meanwhile, the value of the monetary unit was linked to a specific quantity of gold and the gold standard was used between 1900 and 1971, when both were separated and released so that they could be valued on the basis of supply and demand. After that, the US dollar became a "floating" currency, that is, based on economic and global factors, and used the US dollar as the reserve currency, after which gold also adopted a floating exchange rate after 1971 to make a US dollar.
Because gold is quoted and traded in US dollars, some may wonder how each of these phenomena is concerned.
The most common understanding of this relationship is that the stronger the US dollar, the lower the price of gold, the lower the US dollar, the higher the price of gold. . However, this is not always the case, due to exceptional factors: gold and the US dollar have sometimes risen.
Gold, which has been highly valued over the past 40 years, is a safe haven, one of the most important hedging instruments against the risk of exchange rate fluctuations and all economic and political risks, as investors and traders can buy gold to protect themselves.
In recent years, the ounce of gold hit the record high of $ 1,900 in September 2011, in response to concerns that the United States would default on its debt due to the global financial crisis. After this sharp rise, the price of gold has gradually dropped to $ 1,100 the ounce, the US economy has improved, the price of gold has gradually increased up to $ 1,450 last week, under the influence of economic and geopolitical factors.
The ratio of oil to US dollars
Oil and the US dollar are closely linked and more than half of world exports, including oil, are paid in dollars. All OPEC countries sell their oil in US dollars. In total, the volume of trade in this currency in the world is about 3 trillion dollars, any fluctuation in the price of oil in particular and most commodities in general. Coins.
It makes sense that the relationship between the US dollar and oil is counterproductive. In contrast, many other factors directly affect oil prices, including economic factors, such as global growth, demand and supply in the market and the supply of oil to the markets.
In addition, oil is strongly affected by geopolitical factors, particularly in oil-producing and producing regions, or by threats to oil production and exports, resulting in rapid and dramatic price increases. An example of this is the current geopolitical tension in the Strait of Hormuz.
Conclusion The linear relationship between the US dollar, oil, and gold is the opposite, but each product, by its nature and uses, is influenced by a variety of factors. While gold is a safe haven for investors, nations and a valuable storehouse, oil is a source of energy, enters into most of the world's production processes and is affected by economic growth and geopolitical tensions in general.
There were some exceptions: for example, in 2008, oil prices fell sharply from $ 147 per barrel to $ 40 in the same year, while gold prices continued to fall. increase after a slight decline, gold reaching its highest level. $ 1,900 in 2011.
*financial badyst
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