Gold At The End Of The Forex Trading Rainbow

Forget what you already know and understand about Forex Trading, everything may be about to change.

If you thought that the rules of forex trading had already been written, think again. Robert Zoellick, head of the World Bank, may be about to shatter the financial world you think you know by taking the value bestowed on Gold to a new and very different level.

The first and most key point to remember is that this is merely an idea, an idea which may sink far before fruition, but nevertheless it remains an intriguing idea. Zoellick is proposing that the financial markets return to a Gold standard, using Gold as an indicator when setting foreign exchange rates. Rather than being a trading commodity the value of gold would alter to become in essence a type of currency used by countries as a way of indicating their asset value. The possibility is likely to be a reaction to the increasingly politicized value bestowed on money and would aim to restore increased stability for the currency markets.

Specific details regarding the system have not yet been spelled out but Zoellick has suggested that it would need to involve the dollar, the euro, the yen, the pound and (a Chinese yuan) that moves towards internationalization and then an open capital account.

At the moment the nature of his statement merely exists as a vague and distant possibility on the shelf of financial theories. However his timing at invoking debate just moments before the G20 summit where leaders are preparing to tackle financial reform has elevated his statement from a vague possibility to a potential prospect.

IG Markets has the latest tools and resources to assist you with forex trading. These resources range from financial commentary in reaction to key economic developments through to Reuters newsfeeds which alert you to market change.

Forex trading involves significant risk of loss. Please ensure that you understand all risks prior to investing. IG Markets provides an execution-only service. The material above does not contain (and should not be construed as containing) investment advice or an investment recommendation.

Financial Copywriter writing about Forex Trading

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