Gold CFD Trading (XAUUSD)

Gold is often used as a hedge against inflation because its value tends to rise when the cost of living increases. Investors buy gold during inflationary periods to protect their purchasing power, which can lead to higher gold prices.

Gold prices are influenced by a variety of factors including market demand and supply, geopolitical events, inflation rates, and changes in currency values. For instance, during periods of high inflation or economic uncertainty, gold prices often rise as investors seek a safe-haven asset. Conversely, when the economy is stable, gold prices might decline as investors move towards riskier assets like stocks.

Gold prices typically rise due to increased demand during times of economic uncertainty, geopolitical tensions, and as a hedge against inflation. For example, during the 2008 financial crisis, gold prices surged as investors sought safety, rising from around $700 per ounce in late 2008 to over $1,900 per ounce by mid-2011. Similarly, in 2020, during the COVID-19 pandemic, gold prices reached new highs as global markets faced unprecedented uncertainty.

Additionally, the Russia-Ukraine war impacted gold prices. Gold prices surged to over $2,000 per ounce in early March 2022 as investors sought a safe haven amidst geopolitical instability.

Lastly, ongoing conflicts in the Middle East, such as the tensions between Israel and Palestine, and the conflicts involving Israel and Lebanon, contribute to global uncertainty, further driving the demand for gold.

Volatility of gold is driven by factors such as changes in monetary policy, geopolitical events, and fluctuations in the value of the US dollar. For example, when the Federal Reserve changes interest rates, it can lead to aggressive price movements in gold. 

Additionally, geopolitical tensions, like conflicts in major economies, can cause investors to flock to gold, increasing its volatility. Since gold is typically priced in US dollars, fluctuations in the dollar's value can impact prices. 

A stronger dollar makes gold more expensive for foreign investors, potentially reducing demand and lowering prices, while a weaker dollar can have the opposite effect.

Gold prices have been historically influenced by several major events. During the 2008 financial crisis, gold prices increased from around $700 per ounce in late 2008 to over $1,900 per ounce by mid-2011.

Another important period was in 2020, when the COVID-19 pandemic led to gold prices reaching all-time highs of over $2,000 per ounce.

Starting your gold trading journey with zForex is simple:

1. Open a trading account.
2. Deposit to your account with a 30% bonus.
3. Download MT5 and login with your credentials.
4. Select XAUUSD from the instrument list and start trading!

Gold can be invested in various forms, including physical gold (bullion and coins), gold ETFs, gold mining stocks, and gold futures. Each form has its own risk and return possibility.