Gold Finds Support As Key Inflation Rate Hits A 30-Year High

Gold Finds Support As Key Inflation Rate Hits A 30-Year High

Contrary to popular belief, what's good for the goose is not always good for the gander. Last week the U. S. dollar advanced against a basket of foreign currencies to hit its highest level in about a year. For consumers and importers, this is good news, as it means the greenback offers greater purchasing power. For exporters, on the other, and for the price of gold and other commodities that are priced in U. S. dollars, this is a headwind. In the chart below, you can see that gold and the dollar share an inverse relationship. When the dollar strengthens, the yellow metal falls; when it weakens, gold soars. It's important for investors to recognize this relationship because it can help them manage their expectations. The greenback gains back its strength, while gold inversely weakens It's also important for investors to keep in mind that gold continues to be one of the most heavily traded assets on the planet, in case they were wondering if Bitcoin is stealing some of its thunder as a store of value. I often tell people that gold is the fourth most liquid asset, but the most recent data from the World Gold Council (WGC)