The US dollar’s sphere of influence is rapidly reducing. According to the World Gold Council (WGS), a center of trading with precious metal is gradually shifting to Asia. If the trend extends, the correlation between gold and the US dollar will be exposed to major changes, and prior strong interrelation would be over. “And while the fact that the gold price is quoted in U.S. dollars gets a lot of attention, its relevance is overstated,” Juan Carlos Artigas, director of investment research at the WGC, said. Previously, the gold price almost instantly reacted to any movement of the US dollar, but in the mid- and long terms the situation will change. Authors of the research added that the US dollar will gradually lose influence on the value of "yellow metal". Active actions of the Chinese government assist to these changes. Importantly, the country is the largest consumer of gold in the world. In addition, China is promoting its own spot and futures trading. Currently, the Shanghai Gold Exchange has an impressive number of participants. It has real potential to become a major world center based on gold trading in future. At the same time, market participants point out that demand for gold in Asia does not depend on the dynamic of the US dollar. Chinese investors buy gold when the US dollar is growing as well as it is falling. The more such deals are executed, the less the US currency impacts on the value of gold.
