The FX Bootcamp Guide to Strategic and Tactical Forex Trading

COMMODITY CORRELATION: GOLD

The supply of gold in the world marketplace has generally not kept pace with demand. On the supply side, gold producers have not invested in locating new mines in recent years. Demand for both jewelry and investment, however, is increasing, especially as economic growth in China and India has led consumers in those countries to attain greater disposable income.

According to the National Mining Association,

 

“Gold’s superior electrical conductivity, its malleability, and its resistance to corrosion have made it vital to the manufacture of components used in a wide range of electronic products and equipment, including computers, telephones, cellular phones, and home appliances.

Gold has extraordinarily high reflective powers that are relied upon in the shielding that protects spacecrafts and satellites from solar radiation and in industrial and medical lasers that use gold-coated reflectors to focus light energy. And because gold is biologically inactive, it has become a vital tool for medical research and is even used in the direct treatment of arthritis and other intractable diseases.” (www.nma.org/about_us/publications/pub_gold_uses.asp)

 

Obviously there is high demand for gold for use in jewelry, but there is also a huge need for the metal in the dentist industry. According to Discover magazine, gold was first used by early dentists to attach fake teeth back in the seventh century B.C. On an annual basis, as much as 70 tons of gold has been ...