Gold is often denominated and traded in US dollars, so a weak dollar will cause gold to be less expensive to buy. In addition, when US dollars devalue, investors will seek an alternative safe haven, such as gold, to store value. Loosely speaking, gold’s value is often correlated to the strength of the dollar. However, with the introduction of quantitative easing by the US government since 2008, I have always been puzzled that global inflation has not shot through the roof and purchasing power of the US dollar has not been diminished a single bit. In BullionStar’s website, I found my answer.
BullionStar explained that 80% of the global trade is still conducted in US dollars as businessmen still trust the stability of US government. In my opinion, a lot of credit must go to President Obama, who took over from his predecessor, George Bush, during the Great ......