First, because gold is priced in dollars, as the value of the dollar declines, the price of gold will tend to increase. Second, as the value of the dollar declines, foreign investment in U.S. stocks and bonds will decline, adding to the negative momentum in those markets. This will indirectly boost investment demand for gold. February 1985 - November 1987. The dollar's fall was the deliberate result of the Plaza Accords, an agreement by the central banks of the U.S., the United Kingdom, France, Japan and Germany to intervene in global currency markets to lower the value of the dollar.
Gold is a potentially huge score.
John Hathaway , a gold fund portfolio manager It is best if investors do not wait for the trade deficit to begin taking its toll on the financial markets to acquire their financial insurance in the form of gold. By then, it may be too late to buy gold at attractive prices. There has never been a better time to buy gold for less. This site content is 2000 Blanchard and Company, Inc.