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international finance

“The stronger the value of the U.S. dollar, the lower the price of gold”. Critically discuss.

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First, we know that gold is priced in U.S. dollars worldwide. Therefore, when the U.S. dollar appreciates or the U.S. dollar appreciates, it will make gold investment in other countries expensive, because they will need to pay more in their own currency to buy the same ounce of gold, so the local exchange rate of gold becomes More expensive, which will reduce the demand for gold. Therefore, lower gold demand has led to a fall in gold prices.

answered by: Gavin
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