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Why is gold always priced in dollars?

Every currency has a gold price, however as the dollar is the world’s most common currency the gold price is most often given in dollars. In 1971 wh...

14 April 2021

Martin Cozens

Every currency has a gold price, however as the dollar is the world’s most common currency the gold price is most often given in dollars. In 1971 when the value of the dollar was fixed to the value of gold this was $35 per ounce of gold. It is now over $1,000.

Because gold is seen as keeping its value over the medium and long term, those holding gold will often look at the dollar (and other currencies) in gold terms. If the price of gold in dollars goes up this can be seen as gold gaining value but equally it can be seen as the dollar losing value to inflation. Either way, holding gold allows you to hedge against this by holding an asset that keeps value. This is also why gold is seen as the oldest form of money, simply because it has kept its value since ancient times.

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