The XAUEUR quote expresses the value of one ounce of gold in euros. The instrument's rate is influenced by geopolitical and macroeconomic factors and changes in the economies of the USA, Japan, and the UK. Since the EUR is included in the pair, it is especially important to consider data for EU countries in the analysis.
The pair's quotes depend on changes in the Central Bank's interest rates, inflation rate, GDP data, exchange rates, and many other factors. Demand also affects the price. Gold is most in demand in the jewelry industry. Also, precious is utilized heavily in production, such as in manufacturing computer and communication equipment components. The main consumer countries are India, UK, and Switzerland. The leaders in production are China, Russia, and Australia.
The instrument is highly liquid. This means that a large number of trades involving gold are regularly opened in the market. This allows traders to buy and sell the pair at any time and volume. In addition, liquidity provides tight spreads, making XAUEUR a profitable trading tool.
XAUEUR can be called a safe-haven instrument, like other assets that include gold since the value of precious metals tends to rise during economic crises. When the market is volatile, many investors try not to invest in currencies, so to maintain savings, they buy more stable assets, particularly gold.
The XAUEUR commodity pair is perfect for traders who want to invest in precious metals. Also, those traders who want to diversify risks and protect their savings from drawdown should pay attention to the pair. With proper market analysis, XAUEUR trading can bring significant profit. The main thing is to be able to use market mechanisms for your own benefit.
Risk warning: Trading in FX and CFDs entails high risk of losing capital.
