Educational articles

Why is gold popular in volatile markets

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Gold is particularly popular in volatile markets due to its historical role as a safe-haven asset, as well as several key qualities that make it resilient during times of economic uncertainty, market swings, or financial crises. Here’s why gold tends to shine during volatile market conditions: 1. Store of Value What it means: Gold has been recognized as a store of value for thousands of years. Unlike paper currencies or other assets that can be devalued through inflation, currency debasement, …

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Why does the U.S. share market influence the Australian share market?

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The U.S. share market has a significant influence on the Australian share market for several reasons: 1.Global Economic Integration The U.S. is the world’s largest economy, and its financial markets are deeply integrated with the global economy. Since Australia is a small, open economy, its financial markets are highly sensitive to movements in major global indices, especially the U.S. stock market. When the U.S. market moves, it often signals broader trends in global economic conditions, which can affect Australian companies …

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What causes the Australian Dollar to increase in value?

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The value of the Australian Dollar (AUD) can fluctuate based on several factors. While it’s difficult to predict exactly when the AUD will go up in value, here are some key factors that generally contribute to its rise: Commodity Prices: Australia is a major exporter of commodities like iron ore, coal, natural gas, and gold. When global prices for these commodities rise, the AUD tends to appreciate due to higher demand for Australia’s exports. Interest Rates: The Reserve Bank of …

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Why does a placement cause the share price to decline?

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A share placement refers to the process in which a company raises capital by selling shares (usually a large block of them) directly to institutional investors or a select group of investors. A placement typically causes a company’s share price to decline for a few reasons: Dilution of Shares: When a company issues new shares through a placement, it increases the total number of shares in circulation. This dilutes the ownership stake of existing shareholders. Investors often perceive this as …

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What is overhead supply and why is it important?

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Overhead supply is a term primarily used in technical analysis and refers to a situation where there is a significant amount of resistance from sellers at certain price levels above the current price of an asset. This resistance often occurs because previous buyers are looking to sell their holdings at or near their break-even point or for a profit. Essentially, it’s the supply of shares, contracts, or assets that could flood the market if the price rises to a certain …

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