The Gold Rush 2009 - Is On Again!

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InvestTechFX verifies US Dollar hits rock bottom, while gold continues it climb to record highs as investors run for the gold seeking new safe haven. http://www.investtechfx.com

InvestTechFX the worldwide Forex broker offering a 1 pip spread over six majors notes the global economic cycle is going through a time of change, coming out of the worst recession since the 1930s. As a result, more people are now investing in commodities such as gold, silver, and oil. It is during these times that interesting correlations arise between the commodities and the economies of various nations, each commodity reacting differently to different situations. Gold is seen as a haven in times of inflation. This is because it holds an intrinsic value based on the fact that it was once the standard which all currency was held as a marker for, with paper money simply being the representation of the gold which the bank is holding in your name. Gold, silver and oil are all normally traded in USD as well, which means purchasing of commodities essentially opens a short position with the USD along with the long position being taken on the commodity itself.

InvestTechFX analysts have noted that Gold has a trend which goes against the USD. That is, when the USD is going down, gold becomes more expensive to buy. A large part of the reason for this is that the USD is worth less, and therefore it takes more of it to buy commodities such as gold. The relationship is not even however, as gold will usually go up by more than the USD has dropped. This is because when the USD becomes less valuable inflation will occur when more money is needed to buy the same amount of commodities. It is for this reason that gold is seen as a safe haven against inflation, as its intrinsic value remains the same no matter what happens to the USD. In a time when the USD is about to depreciate in value, many people will buy gold. At this time its relative value will increase slightly due to increased demand, however, the decreasing value of the dollar will make the price in gold appear to grow by substantially more as the value of the USD becomes comparatively less. As a result, while the value of the USD is depreciating, investors that bought gold right before the period of inflation started will actually be making money.

InvestTechFX the MetaTrader 4 trading platform offering 1 pip spreads has seen significant differences in the behavior of the silver market. There is little silver coming from mines in the United States, therefore a USD depreciating in value means importing silver becomes more expensive which lowers the demand for silver. Also, only 30% of silver comes from primary silver mines, with the other 70% being a byproduct of mining other metals. Silver is widely used for industrial purposes as well, unlike gold, which has very few industrial uses. Silver is used as a very effective conductor, and is commonly used in cameras and in mirrors due to its high reflectivity. Jewelry and silverware make up a much smaller percentage of the use of silver. These industrial uses mean that silver constantly needs to be mined, unlike gold. However there is less silver supply than there is gold supply. Silver is also the only commodity on the COMEX exchange which has a higher short value than both its production and stockpiles, which helps keep the prices of silver down, despite its variety of uses.

InvestTechFX the leading 1 PIP Forex Corp also offering oil trading has noticed oil’s strong ties to the Canadian economy, as it is that country’s major export. As a result, whenever the price of oil is increasing, it is likely that the Canadian economy and the Canadian dollar are both improving as well. Oil was the first energy source to be widely distributed on the commodities markets. Oil production is limited in its sources, therefore a variety of political factors have a much greater effect on the price of oil then they would on other economies. For instance, a war in a country that mined gold may not have much effect on the price of gold, because it is much less consumable and there are many other countries producing gold. However if a region of major oil fields becomes politically unstable, or is hit by a natural disaster, the price of oil can be greatly affected, depending on the type of impact that the event is expected to have on the ability to continue extracting the resource. This means that oil is more dependent on the news of the day than most commodities. While current events affect all things, oil is highly consumable, and therefore must have a constant supply flowing in. As a result, the uncertainty over its ability to flow is very important in determining its prices.

InvestTechFX world leading 1 pip Forex broker offers the ability to trade these three commodities over their MetaTrader 4 platform, and believes that through expert analyses of the state of these commodities, as well as global currencies and other economic and political factors, can result in substantial gains for experienced and clever traders. By monitoring Forex trades as well as commodities over the same platform, investors can keep track of all of their open trades very easily. With InvestTechFX’s industry leading 1 pip spread over six majors Meta Trader 4 trading platform the potential for gains are even greater. http://www.investtechfx.com

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Steve Choya
InvestTechFX
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