Tag Archive central banks

ByAdmin

What is Inflation?

What is Inflation?

 

Inflation is an increase in the prices of goods and services. However, prices of goods and services may increase or decrease over time. Inflation is not just an increase in the price of a particular good or service, but a steady increase in the overall level of prices.

In other words, it is not inflation that only the prices of some commodities increase continuously or the prices of all commodities increase one time.

For example, the monthly inflation rate is 1 percent, which means that the general level of prices in that month increased by 1 percent compared to the previous month. The fact that the annual inflation rate is 30 percent means that the prices have increased by 30 percent on average compared to the previous year, for example, a commodity basket purchased for 200 TL last year could only be taken up to 260 TL this year.

 

Decrease in inflation; The decrease in prices, the increase in people’s purchasing power, and the increase in income. Declining inflation means less price increases, less purchasing power of people, and stability and prosperity.

 

 

Inflation rates are also very influential on exchange rates, as they can directly affect the steps taken by central banks in monetary policy. Because the inflation rate is the leading indicators for the changes in interest rates of central banks.
For example,
in the event that the inflation rates deviate upward from the targets of the central banks, the interest rate increase expectation is in the foreground, whereas if the inflation rate is below the targets of the central banks, the interest rate decrease expectancy is foreground.

ByAdmin

Forex Gold Market

Forex Gold Market

 

Thanks to its easy handling and durability, it has been a metal that people have been using for various purposes for centuries. The appearance of the jewel is a gold bullion as a reserve tool, and money as a means of exchange.

 

Gold has become a metal that people have used for various purposes for centuries because of their easy handling and durability. Aesthetically it looks like jewel, it is a bullion with the reserve tool, and it comes out in the form of money by being a tool of change.

 

Gold, the basis of the money system between 1870 and 1930, played a pivotal role in the markets (1944-1973), equaling one ounce and 35 euros with the Bretton Woods System. By 1973, the gold fixed exchange instrument with the dollar was terminated, causing it to be used as part of individual savings instruments and central banks reserves. With the development of financial markets, interest in alternative investment instruments increased and demand for gold declined until 2000’s. The increase in the global risk perception during 2000s has made gold a safe port in the market.

 

There are many dynamics that determine the prices of gold, which has been a safe haven for centuries. The effects of these dynamics on gold prices must be known one by one. It has a positive effect on the financial crisis and the price of war gold, contrary to the stock market and money markets. The increase in oil prices and inflation rates has a positive effect on the prices of this precious metal, which has a negative effect on the bottom of the interest rates.

 

Internationally, 1 ounce is considered to be 31.10 grams gold. In leapfrogged markets, 1 lot of gold is calculated over 100 ounces. That is, when 1 lot of gold purchase or sale is opened on the platform, it corresponds to approximately 110 grams of 3 kilograms in physics. When the gold ounce price is accepted as 1270 USD, 1 lot gold on the platform requires a collateral of 1270 USD when calculated over 1: 100 leverage.

 

In the world, this precious metal, which is the most important investment and payment instrument of both individuals and the general economy, has become able to invest more in recent periods. Some difficulties have been observed in physical purchases in the market, where mobility has increased in recent years.

 

Especially, it is known that the rising price of gold is felt more in physical purchases, but it is limited in selling gold at hand. However, the forex market offers such a system that it is possible to deal with these kinds of negatives at the same time as it can be done 5 days and 24 hours at the same time.