Gold in international trade

In the world of international trade, gold has played an important role for centuries as a stable value and internationally recognized asset.
Gold has value not only as a precious metal and an investment vehicle, but also as a tool for creating financial stability and as a hedge against currency risk. The experts at The Silver Mountain discuss the historical and current impact of gold on international trade and the value of gold reserves in today's global economy.

The role of gold in international trade

Gold is used by countries to somewhat protect their economies from fluctuations in the value of their national currencies. When exchange rates become unstable, gold as an internationally tradable asset offers good stability.
Buying and selling gold is often seen as a safe haven for investors and governments looking to protect their capital. Furthermore, gold is particularly suitable for international payments, as the precious metal is recognized and valued worldwide.

Historical influence of gold on trade between countries

Throughout history, gold was used as a standard for determining the value of currencies, known as the gold standard. From the 19th century to the mid-20th century, the monetary system of many countries was directly linked to the price of gold, which stabilized the value of currencies and facilitated international trade.
After the gold standard was lifted in 1971, many countries have continued to rely on gold as part of their national reserves, as gold is often unaffected by inflation. Gold also remains a store of value in times of economic crisis. This has made the precious metal an important asset in international trade for centuries.

Gold as an international currency

Although the gold standard no longer officially exists, gold continues to play a role as an informal international currency. Countries with significant gold reserves often use them to reassure trading partners and attract investors, especially in times of currency crises. In crisis situations, gold is sometimes converted into liquid assets, allowing countries to bridge payment problems.
Gold is also often used as an international currency in developing countries, especially in regions where the national currency is weak.

The importance of gold reserves in world trade

Gold reserves are essential for many countries as a buffer against economic shocks. Central banks worldwide have built up significant gold reserves, because gold has a stable value, independent of other currencies. Countries such as the United States and China have the largest gold reserves in the world.
These reserves strengthen confidence in a country's currency and help countries keep their currency value stable, which is beneficial for international trade.

Future trends of gold in international trade

Gold’s role in international trade continues to evolve. With continued global economic and geopolitical uncertainty, such as rising inflation and tensions between countries and trading blocs, investment in gold is likely to continue.
Countries such as China and Russia are expected to further expand their gold reserves to reduce their dependence on the US dollar. This trend could lead to gold playing an even more important role in global trade in the future, especially as a safe haven in times of uncertainty.
Stay up to date with these developments and discover how gold can be a strategic addition to your own portfolio. Visit our knowledge center for more insights and current trends in the gold market.