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US Dollar Weakens as Gold Price Soars


Currency values are always fluctuating, so the US dollar, like any other global currency, can rise one day and fall the next. Gold, on the other hand, will hold its value, so it’s why people invest in gold if they want to be sure they’ll have something valuable tomorrow.

Recently the US dollar weakened as the price of gold continues to soar and people continue to buy and sell gold on sites like Global Intergold. Continue reading to learn more.

Massive Gains in Gold Value

Early 2016 has proven to be very good for gold prices, which posted a huge one-day gain in February. Compared to the previous 14+ months, the prices were higher than before, and with the continuous troubles facing global financial markets, gold is continuing to be a safer asset to invest in because its value has been steadily growing ever higher while currency values decline.

A Closer Look at the Financial Markets and Their Worth

In order to truly comprehend the modern financial systems that are in place, you have to first acknowledge that these markets are based upon several types of money that are competing. These are also referred to as liquidity, and most of these are actually created privately.

You also need to consider shadow banking and repo markets, which are also referred to as wholesale lending and are increasingly driving the global economy. These markets are concentrated heavily within various private monies. And the value of these monies could significantly fluctuate from one day to the next. When understanding credit flows and capital flows, you have to also go ahead and focus upon the alternating qualities of these monies.

Why Gold Has a Higher Value According to Global Intergold

Many people wonder why paper currency doesn’t hold its value, while gold does hold its value and continues to grow in value. First, you need to split private sector liquidity from central bank liquidity. Central banks will boost the supply of a particular currency, but this ultimately and inevitably results in the devaluation of that currency. In the private sector, on the other hand, when you boost private sector liquidity, it produces a signal of strong economic growth, resulting in increases in industrial profitability and expansion of credit. But no matter what, when you print more money, it devalues a currency.

Gold, on the other hand, is the opposite of paper money. When paper money is weaker, you can expect that gold prices will be stronger. And when paper money is stronger, you’ll also find weaker gold prices. The recent and consistent rise in gold prices, therefore, means that paper currencies are suffering and no longer holding the same value. The US dollar is a prime example of this, as it has weakened at the same time that gold prices have soared.

By having a better understanding of the value of paper money versus gold, and how they affect one another, you can make wiser investment choices so that you can watch your money grow. Right now, if you have the money, you should consider investing in gold.