Gold Trading: The Original Heavy Metal Tops the Charts Again
Gold trading is considered to be the safe bet when traditionally strong currencies start to fall. On April 27th traders responding to the falling dollar and rumors that the Federal Reserve would sustain a loose monetary policy, drove the price of gold up to an all time high: $1538.35 an ounce. With the global recession dragging on it seems unlikely this gold lust is going to be satiated any time soon so for the uninitiated let’s take a look at what gold trading is all about.
As stated gold is seen as a kind of safe haven when traditionally stable currencies start to look risky. This is because though the value of gold can vary greatly over a short period it tends to maintain a stable price over longer periods. As a precious metal gold’s value is not determined by the political or economic woes of any particular nation. As a result its value can never fall drastically like that of a country in recession or at war.
However that is not to say that gold’s value is completely unaffected by national influences. For example when gold is performing well you can expect a similar demand for the currencies of gold producing countries. Similarly, political conflict in such countries can have a dramatic affect on the price of gold.
Gold is traded by different traders for different reasons. Some buy gold as a way of side stepping currency fluctuations altogether. In other words, wealthy people with a great deal of assets and no interest in Forex, buy gold and store it away as a means of safeguarding themselves from the caprices of international affairs.
Others see gold trading as a real opportunity and concentrate on day to day spot trading. With so many uncertainties looming ahead of us there’s only one thing you can be sure of, people are going to keep buying gold!
Processing your request, Please wait....
