XAU – Gold

Gold is the most popular investment of all precious metals, with many investors buying it to diversify risk. The price of gold fluctuates in the commodity markets, and speculation on gold occurs in futures contracts and derivatives. Throughout history, gold has been used as money in countries around the world. The price of gold is commonly benchmarked by the London bullion market. Likewise, gold is traded daily from over-the-counter spot prices, with a currency code of XAU. Though a gold standard was previously common practice in fixing the value of many countries' currencies, no country currently uses the gold standard. Gold is, however, used as a major financial asset for countries around the world.


Past Performance: Past Performance is not an indicator of future results.

Price of Gold

In the late 1800s, gold standards were in effect in multiple countries around the world. However, with the enactment of the Bretton Woods system in 1944, the price of gold was pegged to the US dollar at US$35 per troy ounce. The purity of gold is measured in carats; pure gold is 24 carats, with the number dropping as purity drops. Similar to other investments, gold price fluctuates and can be followed in trends. For example, US$64 in gold in 1973 was worth $900 in 2009, an increase in value of more than 1,000%.[1] The value of gold can be affected by the value of global currencies and commodities, such as oil, and global economic situations, such as war. Currently, the spot gold price is around US$1,200 per ounce,[2] which is based on the futures contracts on global exchanges.

Gold Coins and Bars Versus Gold EFTs

Owning gold directly means that the gold physically belongs to the investor. EFTs (exchange traded funds) are fundamentally digital gold, which involves speculation on the movements of the gold price.

Gold coins are highly refined and produced in large quantities around the world, with weight and purity guarantees by the issuing government. "Unlike commemorative or numismatic coins valued by limited mintage, rarity, condition and age, bullion coins are purchased by investors seeking a simple and tangible means to own and invest..." [3] Gold coins have legal tender status in their country of origin.
Gold bars are created by commercial manufacturers and have no legal tender status. The quality and authenticity of a gold bar is backed by the reputation of the refiner. Gold bars are produced in a wide variety of sizes, from one gram up to 400 troy ounces. The bars are typically marked with the refiner's name, the weight, the purity and the bar's serial number.[4]

With gold EFTs, an investor buys a share of gold holdings from an institution, similar to buying stocks on an exchange. The investor has no physical gold; rather, it is the performance of the price of gold where the investment is made. Because gold EFTs are considered investment materials, they often are subject to capital gains tax, while gold coins and bars may not.

Gold Reserves

As the most globally traded commodity, gold is held in reserve around the world. The largest reserves of gold [5] are:

Country Metric Tons
United States 8,133.5
Germany 3,384.2
International Monetary Fund 2,814.0
Italy 2,451.8
France 3,435.4
Russia 1,094.7
China 1,054.1.7
Switzerland 1,040.0
Japan 765.2
Netherlands 612.5

FXCM Research Team

FXCM Research Team consists of a number of FXCM's Market and Product Specialists.

Articles published by FXCM Research Team generally have numerous contributors and aim to provide general Educational and Informative content on Market News and Products.



Retrieved 29 Dec 2014 http://gold.goldprice.org/2009/09/investing-in-gold.html


Retrieved 29 Dec 2014 http://goldprice.org/


Retrieved 29 Dec 2014 http://www.usmint.gov/mint_programs/american_eagles/action=american_eagle_bullion


Retrieved 29 Dec 2014 http://goldprice.org/2007/08/gold-bullion-investments-which-to-buy.html


Retrieved 29 Dec 2014 http://www.resourceinvestor.com/2014/10/07/top-20-largest-gold-reserves-by-country-2014-editi

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.