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Investing in Gold online - Precious metal market with high volatility
Here is everything you need to know before starting your Gold trading online with brokers.
- What’s the origin and history of Gold?
- Today you can invest in Gold very easy
- How do you invest in Gold market?
Gold has always been and will be at the price.
This fact has long been recognized as an axiom.
Therefore, investing in gold is one of the most reliable financial instruments, and investing in gold bullion is the most popular of all types of investing in precious metals.
What’s the origin and history of Gold?
Gold is an item 11 of the sixth period of the periodic table of chemical elements DI Mendeleev , with atomic number 79.
People extract gold from immemorial time.
Mankind has faced with gold in the V century BC in the Neolithic period through to its spread in the native state.
By assumption archaeologists the start of systematic extraction was in the Middle East, where gold jewelery supplied, particularly in Egypt.
It was in Egypt in the tomb of Queen Zer and one of the queens of Pu – abi of Ur in Sumerian civilization found the first gold jewelry dating from the III millennium BC.
At the beginning of the 20th century, the gold trade has played an important role in China.
China is the major player in Gold market
In 1930, the Shanghai Gold Exchange was one of the largest centers for the trade of gold bullion and gold, in Asia has been very popular as an investment.
On the market there was a daily fixed price of gold.
With the creation of the People’s Republic in 1949, the People’s Bank of China has monopolized the trade in precious metals.
In 2000, the PRC government has decided to resume regular gold market, and in 2001 ended the monopoly of the central bank’s gold trade.
With the establishment of the Shanghai Gold Exchange on October 30, 2002, the gold trade has expanded thus stimulating demand.
Lifted the ban on trading in gold for private investors.
In the next five years, China has overtaken the U.S. to India and became the second-largest buyer of gold in the world.
In 2010, the trade turnover physical commodity (natural gold) amounted to 6,051.50 tons of gold which exceeds the volume of trade last year 2009 to 28.46%.
On the Shanghai stock exchange of gold bullion was in the amount of 2,913.73 tons against 837.21 tons in the previous period.
List of Online Forex and Gold Brokers
Today you can invest in Gold very easy
Today we have a unique opportunity to trade of gold on the famous Forex market.
Of course, currency trading is the most familiar and easiest way to trade on any exchanges, but when you have a good grasp of the mechanisms and understand the basic levers of the market, sooner or later you stop to think about the trade of anything else.
It should be noted that the rate of gold on the Forex is constantly changing , but in a more predictable range , than the exchange rate.
In fact, gold trading allows you to earn more and more stable than you can imagine.
Steady rise in gold prices makes this precious metal trading at Forex, perhaps the most promising type of earnings , attracting a large number of traders.
In order to start trading in gold on the stock exchange, as well as currency, you only need to open a position.
However, the principle of such trade has its own characteristics and nuances, which will be discussed later.
Invest in Gold with Online Brokers
How do you invest in Gold market?
To start, you need to choose the right strategy.
For beginners, a suitable strategy is “to play on the news .” In other words, contracts for gold.
You buy futures contracts, they are traded and this metal is better to buy for extended period of recession and do not pay attention if the price will fall further and further.
Gold has a high volatility (statistical measure of the tendency of price volatility ), and requires a calm and thoughtful consideration.
After a relatively long price decline , the probability of returning to their former positions , and even exceeding them , is very high.
To successfully trade in gold, you need to know complex system of rendering the forecast price of gold, so you will know the causes that affect the quotation of the metal.
Also worth noting is that the volatility of the index may be calculated by a rather complicated formula, however, in the case of gold, just look at the price chart for a specific period of time.
The zigzags of the curve clearly show the high volatility.
This is the feature of this metal is that it is the most responsive not only to changes in the economy, but also on political events.
We list the main factors influencing the formation of the price of gold:
- Macro-economic crises (global financial crisis). Thanks to these crises, gold prices are always increasing.
- The dollar value (this world currency, the pair of dollar is gold, when dollar becomes cheaper, gold becomes more expensive).
- The geopolitical situation (for example, a series of revolutions in the Middle East provoked the jump rate of gold).
List of Online Forex and Gold Brokers
Open an account with online Forex and CFD brokers
The latest multi-functional trading software platforms enables traders to work remotely in real time in any market, including Forex, CFD, futures and stocks.
These terminals provide the means to be present in the market at any point in time track the desired commercial information and make trading deals directly, in compliance with all necessary terms and conditions.
Many online Forex and CFD brokers offer the customers the opportunity to trade on the online platforms.
The online trading platforms let all investors easily manage their assets, enter positions, preform technical analysis, create, test and improve their own trading strategies, including for gold.
You can also open a demo account and gain experience in the trade of gold, without any cost.
Appeal of the game on a course of gold is that in this case, you can create forecasts for changes in prices through technical analysis or by using automated advisers.
List of Online Forex and Gold Brokers
Don’t forget the Golden Rules of online trading
Finally, remember that the “golden rule” in the gold trade in the Forex market is a correlation between the price of gold and the U.S. dollar (xua and usd).
In this article we have tried to describe in detail all the benefits of the gold trade in Forex, but it is worth noting that trade in precious metal and has a special place in the fund market, where gold acts as a real asset.
If you have not had time to see all the benefits of trade in gold, do not be afraid to explore new horizons.
Online Forex and CFD brokers help you understand all the intricacies of the game and expands your understanding about the limitless possibilities of Forex.
It is undeniable fact that gold always attracts a high price.
The unique qualities of this metal make it the undisputed leader among other similarly attractive investment opportunities.
In a previous article we discussed the advantages of the gold trade in the Forex Market.
Today we will consider the basic principles of the gold trade on the stock market.
Precious metals are highly liquid assets. Investing in gold is one of the ways to minimize risks in terms of inflation.
Just as our clients are able to trade gold on Forex, so too, are they able to do on the stock market.
Golden Rules of Online Trading
Gold trading through options and futures contracts
Gold Trading, as is the case with foreign exchange trading, can be carried out with leverage (the ratio of debt to equity).
A loosely formed option contract (stock option) is the standard exchange contract for the right to buy or sell an asset exchange, including a futures contract at the strike price before (or on) the due date for the payment of a right to a certain amount of money, called a premium.
“Buy” option – is to enclose it under the buyer and the “sell” option – is to enclose it under the seller.
Usually there are two types of options in stock practice: to buy (option “call”) and to sell (“put” option).
In the first case, the option buyer acquires the right but not the obligation to buy an exchange asset.
In the second case, the buyer has the right but not the obligation to sell the asset.
The option buyer can be named as holder or owner.
Seller of the option is called subscriber.
Options on futures contracts offer significant opportunities for insurance (hedging) risk, and allow a transaction with a high yield, low cost and limited risk.
Options can be used by active investors with a small amount of funds, as well as by big professional participants of market.
List of Online Forex and Gold Brokers
Example of Gold Online trading
To build positions in options that matching your goals, you need to have your own prediction about the direction of the market, have an idea of how long you are going to take the position and have a point of view on the level of volatility in the market.
Option trading, most people start with the construction of the positions on the basis of predictions about the direction of the market.
Investors achieve a higher level of skill, when familiarized with the mechanism of the stock options, begin to feel better their level of comfort with the positions of different lengths.
Only at the highest stage comes understanding of the impact factor of the volatility in the trading decisions.
Consider the example of a standard purchase of option on gold, which will help you to further explore the mechanism of precious metals trading at the stock market.
Suppose that gold is trading currently at $ 300 per ounce.
You bought 50 ounces, and now your goal is to build a stock option strategy that will increase the profitability of the basic position or protect against loss.
Scenario I. You predict a sharp rise of the price of gold tomorrow.
You buy a short-term call options. Their price is relatively low, but if your prediction is confirmed, the value of your position will increase in many times.
Scenario II. You expect a slow growth market.
You sell a call with a strike price of $ 310 for 1 month at a premium of $ 1. So, you find yourself in a long position for gold, and in a short for call on option.
If after a month, on the day of expiration of the option, gold will trade higher than $ 310 per ounce, you will have to sell your positions for 310 dollars to buyer of option.
In this case, your profit is $ 11 (310 – 300 + 1), i.e. the price difference between buying and selling plus the premium received for selling the option.
If on the day of expiration of the option gold will be trade at a price between 300 and 310 dollars per ounce, such as 305 dollars, this strategy will increase the profitability of the position.
In this case, you will earn $ 6 (305 – 300 + 1).
If at the expiry of the option gold will trade below $ 300 an ounce, this strategy will reduce your losses to the amount received for the sale of premium.
In conclusion, it should be noted that the purchase of option on gold is a unique chance to minimize your risks by purchasing time-tested, constantly growing in value, assets.
Remember, there are no stupid questions.
Online Forex brokers provide their customers with all the necessary technical and information support.
