There are a lot of recent speculations about something called currency war. It is a popular topic widely disputed in connection to the current economy backdrop. But most important thing about the issue is the possible benefit for gold.
Countries such as Japan are trying to propel their growth by strong monetary stimulus. In respond their currencies have lost power. Though, the exports have boosted. All of this could come in aid the yellow metal. The effect of the currency war can change the gold connections with the foreign-exchange market. Also the precious metal can improve its appeal as safe haven commodity.
According to an expert market analyst, a new age is coming. Really soon currencies won’t measure the precious metal. It will be opposite as gold will measure currencies.
In historical patterns the yellow metal trade in contrast of the US dollar. We have seen this trend a lot recently. Check the search angines about articles like: “Gold edged down as US dollar gains at euro expense.”
We must understand that is not a normal war. When it comes to currencies there are no losers and winners.
However, if currencies are loosing their value, gold safe haven’s appeal could strengthen further.
The time when gold will rise above all currencies is coming with a steady pace. Recently, the Japanese yen and the Swiss franc lost their appeal as safe haven currencies. Therefore, their money has weakened. Basically currencies are the same thing with different name.
The bullish performance of gold started about ten years ago. The loose money policies of
Central banks were the main rally factor.
The systematic devaluation of currencies by national monetary stimulus was also a main driver for the decade of gold rally. Yet, this trend continues as of now. It doesn’t matter if there is a war between the currencies, because gold is the ultimate beneficiary of it.
