Forex Trading Blog

One of the most important ways to save people in extreme situations is a stable economy, which helps to eliminate hunger, protect people and cope with disasters. But money is not very stable to all kinds of changes. It is similar to the market system that allows it to drop or increase in price.

Sometimes we pay attention that prices for different products rise from time to time. The reason is not because they become more expensive, it is because the money itself worth less. A country where money supply is not tired to gold, has inflation. If the currency of the country is pegged to the gold stocks so the crisis is virtually invisible and the national currency is stable to fluctuations.

Checking the prices on gold during the last period you can notice that they are vary all the time. Though it is not the price of gold that is hesitating, it is the price of money against gold moves up and down. Virtually the gold price remains steady for many centuries though the quantity of money you need to buy gold changes from time to time.

You may enquire why there are so many cases of countries’ bankruptcy, inflation if the quantity of existing money is equal to the gold. The reason is that the world economists want to raise the value of the money and the ways they used to do so cause all kinds of economical disasters where common people suffer. Instead of curing the economic situation of the country by increasing the gold stocks, economists choose the method of inflation releasing more money. As a result all becomes expensive and people don’t have enough cash to buy things. Money devaluates more and more and all this leads to poverty and chaos.

Today there is so much money in the world, that it is impossible to compare it to the rate of gold, because it would rase the price of gold in a million times. For that reason such actions as inflation is necessary to do in order to preserve the stability of the world economy.

The usage of electronic money changed the situation. Banks have a lot of virtual money that are not secured by any gold reserve. So we can say that the present price of gold has being purposely significantly diminished.

Gold is one of the most traded commodities in Singapre Forex market. Silver and Oil are popular too but their popularity are much lower. There are also many other commodities like Platinum, Rice, etc available for trading by many Singapore Forex brokers. Trading commodities is much different than currencies. Commodities market is more noisy and usually has wider spreads that requires any Singapore trader be more careful in building his trading strategy.