Gold’s history is a rich history going back to ancient times. As a precious metal, it has been considered a sign of prosperity and success in many cultures.

Throughout the world it was generally used as a standard of monetary exchange which was only abandoned once governments issued the flat currency.

Gold continues to remain an important asset and in modern times is used as a safe haven in times of economic instability. In the late 1960’s Gold trading was steadily developed from a purely physical exchange.

During this era, trading of Gold by individuals was limited as the cost for physical delivery along with legal constraints to certain countries prohibited any efficient trading of this precious metal.

As a result, a number of banks began to offer trading of Gold as a non-physical exchangeable commodity. IronFX UK offers Gold trading to all individuals. Gold is mainly traded against the USD and its symbol is XAU.

The symbol XAU originated from the Latin word aurum (AU) and has become the international standard code for gold bullion. Gold prices are highly correlated to oil prices.

Between 1965 and 1994, the monthly correlation between these two commodities reached an impressive 87.9% and presently the interlink is approximately 71%.

Many investors believe the main reason behind this high correlation is the 1970s supply disruption crisis. Inflation is also considered another significant driver of Gold prices.

The consequence of rising interest rates to fight inflation creates a negative climate for stock and bond trading.

Investors looking for safe haven therefore tend to shift their investments to precious metals such as Gold. Moreover, the price of Gold tends to have an inverse relationship to the price of the USD.

Due to the fact that, the dollar is recognized as the world reserve currency and Gold is priced in USD, a weak dollar tends to raise the price of Gold.

Silver on the other hand, is less expensive than Gold and has been overshadowed by Gold.

Silver trading XAG, from the chemical symbol Ag and the international standard code for silver bullion is XAG, is in quantities of 1,000 ounces.

Silver often lacks liquidity and large sudden moves may catch the market off guard.