Online Gold Trading (XAU/USD)
"Gold Is money, everything else is credit" J.P. Morgan, 1912
All the gold ever mined in our world totals about 170,000 metric tons. At XAU/USD $1,200 per troy ounce, 170 thousand of metric tons of gold worth $6.5 trillion or else 8.5% of the world's nominal GDP.
■ Symbol: XAU/USD | XAU/EUR
■ Organization: World Gold Council (» Visit)
■ Annual Demand: about 4,250 tons
■ Total Supply: 170,000 tons (worth 6.5 trillion USD)
■ Mining: 2,500-3,000 tons are mined each year
The global demand for Gold can be divided into five (5) major categories:
(1) Jewelry (45.0%)
(2) Investment Gold (35.0%)
(3) Central Banks (10.0%)
(4) Technological Applications (7.0%)
(5) Other Demand for Gold (3.0%)
Chart: Gold per World's Population
Long and strong trends, very tight spreads, and common Bank of Japan currency interventions
■ Forex Pair: The United States dollar (USD) against the Japanese Yen (JPY)
■ Forex Slang: YEN
■ Currency Reserves: $121 billion (US) against $1,263 billion (JAPAN)
■ Population: 319 million (US) against 127 million (JAPAN)
■ GDP: $18,600 billion (US) against $4,410 billion (JAPAN)
■ DEBT/GDP: 107.5% (US) against 249.3% (JAPAN)
■ Current Account: -$484 billion (US) against +$137.5 billion (JAPAN)
The USDJPY is of the three most important currency pairs in the world, along with EURUSD and GBPUSD. Actually, USD/JPY is the 2nd most-traded currency pair, representing about 15% of all Forex trading activity. USDJPY is commonly used by day traders and scalpers as it is very liquid and provides tight trading spreads.
The USD and the JPY are also the 1st and 5th most held reserve currencies worldwide:
USDJPY Correlation to the US Stock Markets in Six (6) Steps
It is very interesting that USDJPY is highly correlated to the US stock markets. This is a short explanation of this phenomenon:
-1- When investors are willing to buy US stocks, they tend to borrow in Japanese Yen (because of the tight JPY interest rates)
-2- Therefore, they are borrowing capital in JPY, and then selling JPY to buy USD
-3- That causes short-term demand for USD and selling pressure for JPY
-4- When investors are selling US stocks, they close their Japanese Yen borrowing liabilities
-5- Therefore, they are selling USD to buy back JPY, and repay their loans
-6- That causes increased demand for JPY and selling pressure for USD
From time to time, the dynamics of that simple mechanism can determine the USDJPY short-term exchange rate.
Find more: » Correlation Between USDJPY and Stock Indices
These are some key facts about USDJPY:
-The US Dollar is involved in about 85% of all currency transactions
-The Japanese Yen is involved in about 19% of all currency transactions
-In terms of GDP, the US economy is the largest in the world, and Japan’s economy is the 4th largest in the world
-Japan is the 2nd largest creditor of the United States, after China
-Japan's Public Debt / GDP is one of the greatest in the world
-Japan's currency reserves ($1.26 trillion) are the second largest in the world, after China
-Often interventions in the USDJPY market by the Bank of Japan (BoJ) (» more from Reuters)
Compare the USD/JPY Trading Conditions
These are some regulated CFD providers offering Forex trading, all brokers provide segregated client bank accounts and have been in the market for a period of at least 5 years.
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■ ECN TRADING: YES (SWFX MARKET)
USD/JPY: 0.4 pip plus trade commissions $3.5 full-traded /lot
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