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INFLATION AND INTEREST RATE EFFECT ON GOLD for FXOPEN:XAUUSD by wajidalikhan2123

Q.What is inflation and example?
Inflation occurs when prices rise, decreasing the purchasing power of your dollars. In 1980, for example, a movie ticket cost on average $2.89. By 2019, the average price of a movie ticket had risen to $9.16

Q.Does printing more money cause inflation?

Does Printing Money Cause Inflation? Yes, “printing” money by increasing the money supply causes inflationary pressure. As more money is circulating within the economy, economic growth is more likely to occur at the risk of price destabilization.

Q.What is meant by interest rate?

An interest rate tells you how high the cost of borrowing is, or high the rewards are for saving. So, if you’re a borrower, the interest rate is the amount you are charged for borrowing money, shown as a percentage of the total amount of the loan

Q.What is the relation between inflation and interest rates.

In theory, inflation and interest rates are in an “inverse” relationship: When rates are low, inflation tends to rise. And when rates are high, inflation tends to fall.

CONCLUSION :

If inflation rises then dollar gets weak and Gold price will rise. If interest rates rises it decreases the inflation making the dollar strong and Gold price will decline.

INFLATION UP : DOLLAR DOWN : GOLD UP

INTEREST RATE UP : INFLATION DOWN : DOLLAR UP : GOLD DOWN

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