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On Tuesday, gold jumped to a report of $ 3,508.50 (3,015.08 euros) per ounce, which caused expectations to reduce interest rates of the US Federal Bank and increase uncertainty for investors.
Precious metal is considered a refuge for investors, while its demand increases sharply when confidence in the stability of paper coins or financial markets retreats.
Earlier this year, gold prices jumped when US President Donald Trump announced a number of conflicting duties against other countries.
The golden price emphasizes deep concern about the global prospects and questions about the independence of the federal, since US President Donald Trump is pressure on politicians.
The dollar is no longer the “golden rule
The increase in gold prices occurred in the context of perennial rally for precious metals.
The central banks from Asia to the Middle East accelerated their markets during the fourth year in a row, adding strong prices to prices, and the government will purchase high prices for gold reserves.
This step shows a decrease in dependence on the US dollar, while Washington’s tax exchange rate and political battles erode its position as a global backup currency.
A survey conducted by the World Golden Council in 73 central banks showed that 95% of them are expected to increase their gold shares over the next 12 months, while almost three quarters, as expected, will reduce their shares in dollars.
China, which is still negotiating with the United States under a more profitable trade agreement, accumulates gold monthly, registering July in the ninth month in a row.
Delho outputs will damage the most reliable currency in the world
For most of the modern history, most national coins were directly related to gold, that is, the governments guaranteed that paper money can be exchanged with a permanent weight that was stored in their shares.
Daily transactions were made with paper money, because it was much easier than the calculation of the cost of gold or the transfer of gold bars, while the government supported these gold notes, which were safely stored in their treasury.
After the Second World War, dozens of allied nations gathered in Bretton -Woods in New Gampshire for a monetary and financial conference of the United Nations.
They decided to create an international currency fund and the World Bank and created a system in which the US dollar was connected to gold $ 35 per ounce.
In other words, the dollar represented 1/35 of ounce. At that time, this connection gave the dollar unprecedented reliability, because the United States occupied most of the global gold reserves.
This system ensured stability in global trade and investments for about 27 years, until the United States refused to communicate with gold in 1971, the collapse of the Bretton -Woods system.
Ghosts Bretton Woods
Bretton Woods collapsed in 1971, when US deficit and inflation exhausted gold reserves, which made the connection of $ 35 unstable.
President Richard Nixon then finished the appeal of the dollar, forcing the coins to vary freely.
As soon as the coins began to swim after Bretton Woods, currency or forex markets became a field where their prices were set.
Instead of the governments guaranteeing fixed equalities, traders, banks and central banks are currently buying and selling coins against each other, and prices over time to change per second.
Now the US policy again affects the habits of the purchases of central banks, and it is especially symbolic that gold exceeded $ 3,500 per ounce is an increase by more than 10,000% of Bretton Woods after the Second World War.