Gold’s Rise as a Global Currency
Why is Gold valuable
Gold has always held a unique place in global finance, but recent trading trends suggest something even more significant is happening. A decade ago, I wrote an article questioning whether gold was evolving beyond its traditional role as a commodity. Today, ten years later, the question is more relevant than ever: Is gold quietly becoming a major global currency?
With explosive growth in spot gold trading, rising participation from retail traders, and forex brokers treating gold nearly identically to established currencies, the transformation underway is hard to ignore. Below, we revisit the argument and explore why XAUUSD is increasingly traded like a currency rather than a commodity in modern markets.
Why is Gold valuable
The Growth of Spot Gold Trading
Although I follow gold closely, I do not trade spot gold directly. As a U.S. resident, regulations prevent me from trading physical spot metals, forcing me to use gold futures instead. That’s why it was such a surprise to see how dramatically the spot gold market has expanded in recent years.
The shift became impossible to miss when the number of spot-gold posts on the Global-View Forex Forum. particularly XAUUSD trading posts, increased. These conversations were not focused on long-term investment or physical buying; rather, they were centered around short-term trading strategies, leverage, and price action, just like currency pairs.
This sparked the question:Is gold now being treated more like a currency than a commodity?
What Drives the Price of Gold? Commodity or Currency?
Gold’s price is complex, influenced by several forms of demand:
- Physical gold (bars, coins, jewelry)
- Paper gold, such as ETFs
- Futures contracts
- Margin-based spot gold trading
But if we isolate the fast-growing spot market, its behavior aligns more closely with currencies than with traditional commodities like oil or wheat.
Online forex brokers are a major reason why.
How Forex Brokers Turn Gold Into a Currency
Most retail forex brokers now offer XAUUSD alongside major pairs like EURUSD or GBPUSD. They determine:
- The bid/ask spread
- Available leverage
- Minimum and maximum position sizes
- Margin requirements
This flexibility mirrors the forex model andnot commodity trading.
For traders, this is appealing. They can choose their leverage and trade micro-sized lots that are not tied to rigid contract amounts. Although high leverage on gold is risky due to its volatility, the structure itself encourages traders to treat gold like another currency.
By comparison:
Gold Futures vs. Spot Gold
Spot gold increasingly trades like a currency because it offers flexible position sizes and broker-defined leverage, similar to major forex pairs. Gold futures, by contrast, use fixed contract sizes and exchange-controlled margins that often rise during volatility, along with added commission costs. This makes spot gold more accessible, lower-barrier, and more attractive to retail traders, driving its growing reputation as a currency-like market.
While futures markets remain the standard for institutional traders, retail interest in trading spot gold reinforces its currency-like role.
Is Gold Becoming the “8th Major Currency”?
Traditionally, the major currencies are:
USD, EUR, JPY, GBP, CHF, CAD, AUD, and NZD.
Increasingly, traders are adding XAUUSD to that list, not formally, but in practice.
Why is Gold valuable
Here’s why:
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Central banks hold gold as a reserve asset
It is still viewed globally as a store of value and a long-term hedge.
-
Traders use gold as a safe-haven currency
During volatility, money often flows into gold just as it does into the dollar, yen or Swiss franc..
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Forex-style crosses may emerge
If pairs like EURGLD or JPYGLD gain traction, gold’s status as a currency would strengthen further.
-
Trading behavior aligns with forex norms
Short-term speculation, technical analysis, and leveraged positions dominate spot gold trading.
Despite gold’s mixed identity, commodity, currency, and store of value, the trading community increasingly treats it like a global currency.
Where Gold Stands Today: Between Commodity and Currency
Gold may not officially join the list of world currencies anytime soon, but in the trading world, it already functions like one. Spot gold behaves more like a fast-moving, forex-style instrument than a traditional commodity. Its role in global finance continues to evolve, and today it sits squarely between the two categories.
If gold-based currency crosses expand and retail participation continues to surge, gold may very well cement itself as the unofficial “8th major currency.”
For now, one thing is clear:
When traders look at XAUUSD, they no longer see just a metal, they see a currency in its own right.
XAUUSD Weekly Chart: Up 68% in 2025 to a record $4379 high.
Why is Gold valuable
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