£ $ implications for UK Gold prices

[GodsMoney]

Hi can anyone explain in layman's terms for me the impact of the high dollar on GBP gold prices? I understand high dollar represses gold price but I cant work out the impact on golds price in £, is it expensive in £ or cheap in £ for example?

[flyingveepixie]

Not too sure TBH.  I remember looking at the charts last month or a couple of months ago when Gold spot was high in £ but low in $.  I think it was when the FED announced a stop to money printing, but I'm only guessing.   There are a lot of factors which seem to influence the gold spot price and I don't think it's linked to any one particular phenomenon. There's also a lot of manipulation and gerrymandering which goes on in high places..

You should have a look at the gold price in £s thread at the top of the gold page.

Edited November 17, 2022 by flyingveepixie

[HerefordBullyun]

2 minutes ago, carrigher82 said:

Hi can anyone explain in layman's terms for me the impact of the high dollar on GBP gold prices? I understand high dollar represses gold price but I cant work out the impact on golds price in £, is it expensive in £ or cheap in £ for example?

Simply put its the exchange rate $ vs £ so if the dollar weakens the pound get stronger the price of gold goes up.

[flyingveepixie]

4 minutes ago, HerefordBullyun said:

Simply put its the exchange rate $ vs £ so if the dollar weakens the pound get stronger the price of gold goes up.

I thought the spot price went down if the pound strengthened ?

Edited November 17, 2022 by flyingveepixie

[Zhorro]

OK, I'll have a go...

If we take last month the Pound fell to $1.03, so the Pound was buying less and therefore the price of gold in Pounds went up (assuming that the price of gold in Dollars did not change).

So, if the Pound falls against the Dollar, the Pound cost of gold will go up.  If the Pound rises against the Dollar, the Pound cost of gold will fall (all assuming there is no change in the Dollar price of gold).

[HerefordBullyun]

49 minutes ago, flyingveepixie said:

I thought the spot price went down if the pound strengthened ?

Yes sorry your right got the wrong way round. I suffer with a TBI (traumatic brain injury).

[CANV]

if the USD is strong. as it has been.  then alll commodities priced in USD (nearly all of them )  goes up in GBP terms. gold included.  

Countering this effect globally, when the USD is strong commodity prices are usually supressed.   look at Gold prices in USD

When this multi year USD bull run ends (and it probably is) the price of gold will go up.  in USD.  but as GBP rises the effect will be less for us in Blighty.  

[scotwasp]

This is a great question, to us newbies it’s a total conundrum, I’ve spent hours on trying to figure it out!

then just decided I didn’t have the mental capacity for it and just decided to follow my tried and tested strategy of buying as much as I can afford every month and hoping that it flattens the risk over the long term!

 I do of course follow all the clever chaps on the forum buying and selling patterns with interest. 🤔👍

[modofantasma]

14 hours ago, carrigher82 said:

Hi can anyone explain in layman's terms for me the impact of the high dollar on GBP gold prices? I understand high dollar represses gold price but I cant work out the impact on golds price in £, is it expensive in £ or cheap in £ for example?

GBP down Vs dollar then gold = more expensive relatively. 

As @CANV says, when demand for dollars is higher it's a headwind for gold price. 

 

[Roy]

22 minutes ago, modofantasma said:

GBP down Vs dollar then gold = more expensive relatively. 

As @CANV says, when demand for dollars is higher it's a headwind for gold price. 

 

You boys are up late!

I remember reading something once, I can't give credit but probably belangp.

There comes a time when you stop thinking of gold in terms of pounds or dollars but only in ounces and grams. Of course, you have to still pay your bills in £ and $, but that's not what gold is for.

Rather than thinking I've got £148,000 in gold, for example, you just think of the 100 ounces under your bed. If your target is 100oz, then the price of gold is irrelevant, only it make take a longer or shorter time to get there!

[modofantasma]

2 hours ago, Roy said:

You boys are up late!

I get up early 👍🏼 

Yeah I take note of some of the more interesting fiat milestones but the weight is what I target too

[GoldStatue]

You can see that spot prices go up and down and people outside the USA have to worry about exchange rates, but these are macro factors that you can't predict and can't control.

So once you understand the relationship between the pricing of gold and currency fluctuations does it really matter? You're still going to buy gold and it doesn't give you any specific edge when making the purchase.