The Secret Between USD and Gold

The reason why this will happen is because Gold is priced in U.S. Dollars. Thus, if the value of the U.S. Dollar goes down, more of those Dollars are needed to buy the same amount of Gold, so the price of Gold instantly goes up; conversely, if the U.S. Dollar goes up, the price of Gold goes down. It's a direct, mathematical relationship. To understand the relationship more precisely, the Dollar has an "inverse" affect on Gold. While it's true that a 1% drop in the Dollar would basically mean a 1% rise in Gold.

Gold
There is sometimes that Gold will be outperform than the USD it is because Gold has its own supply and demand fundamentals as well. These are factors affecting the Price of Gold that have less of an affect on the U.S. dollar such as changes in demand for gold for jewelry or for industrial or dental applications, increases or decreases in mining and others.

US Dollar
The USD used to be considered the safe haven because of US being the largest and the most reputable country but not anymore and many people are shifting they money towards Gold because it can resists against worldwide economic shocks or tensions.

What is Commodities?

Ever wonder the oil that you used that get your cars moving and the bread you have every morning come in the first place before they even turning into a finish product?

Commodities
All of the natural resources such as oil, coffee, silver, etc are called commodities. Everyday there is people making $$ by betting or speculating on whether there is more or less of those things available in the future.

How to Trade?
Most people trade commodities using futures by buying and selling those contracts to deliver a set amount of a commodity, such as oil from West Africa, on a set date for a set price.

How it Changes Prices?
Changes in

• Weather
• Politics
• People's expectations about what's going to happen - Speculation
• Supply & Demand

What is Future Contract?

Future Contract is a standardized contract that traded on a futures exchange, to buy or sell a certain underlying instrument at a certain date in the future, at a specified price.

The future date is called the delivery date or final settlement date. The pre-set price is called the futures price. A futures contract gives the holder the obligation to buy or sell. Both parties of a "futures contract" must fulfill the contract on the settlement date.

Example: If you're a baker and you need to have wheat to bake your special walnut wheat sourdough bread next summer, and you're not sure that there's going to be enough wheat to sold in the market at that time so you can buy a futures contract to guarantee that you'll have the amount of wheat you wanted with a preset price.

Who trades futures?

Hedgers
Who have an interest in the underlying commodity and are seeking to hedge out the risk of price changes such as when the fluctuation of gold price, you may want it to set a price which you and the gold producer agreed upon.

Speculators
Who seek to make a profit by predicting market moves and buying a commodity "on paper" for which they have no practical to produce it becoming a finish products and they sell the contract to other producers when the prices of the contract has rises.

Role of Stock Exchange

There are a lot of Stock Exchange worldwide that its main activities are provides "trading" facilities for stock brokers and traders, to trade stocks and other securities.
Example of the Stock Exchange are

New York Stock Exchange

Tokyo Stock Exchange

Bursa Malaysia

NASDAQ Stock Exchange

Samples of The Majors Currecies

There are many currencies in the world and most people focuses on the biggest and most liquid currencies that is called "The Majors"

US Dollar

Japanese Yen

Euro

British Pound

Swiss Franc

Canadian Dollar

Australian Dollar