From as early as 560 A.D. through to 1971, before the end of the Bretton Woods System, gold had been used as the sole or a key currency in many countries. In even more ancient times, nations and peoples had the custom of storing gold as reserve.
Gold has always long been used to back the value of currencies or jewelleries. In nature, gold is found in granite, in quartz veins and in sediments. Gold has the highest density, softness, brightness and ductility among known metals, and is therefore widely used in modern industries such as applications in dentistry and electronics. Before the end of the Bretton Woods system, gold was the foundation of the gold standard currency system. XAU is the ISO currency code for gold bullion.
Currently there are 12 gold futures markets and 8 spot markets for bullion trade, supporting 24 hours transactions. The four Exchanges in London, Zurich, New York and Hong Kong provide global indices for gold price. The most established futures market are that of the New York COMEX, with the Tokyo TOCOM coming second.
Gold prices are predominantly affected by its international trade and stock value, and much less significantly by the demand for industrial applications. As the US dollar plays a key role in the global financial system, a strong dollar will put pressure on gold prices, and vice versa. Therefore, all the factors that influence the dollar have impact on gold. Oil prices are also an important influencing factor, as the rise of oil prices are often the sign of inflation, which tends to increase the demand for gold. Political factors in producing countries, the pricing relations between gold and other precious metals are also key elements that affect gold prices in the market.