If we look closely at historical gold prices, we see that the general trend, since its first quotation and, especially, since the end of the fixed parity of the precious metal with the US Dollar, was very broadly bullish. The explanation for this phenomenon is due to several factors:
First of all, it should be noted that gold is an increasingly rare commodity and that, since it has been exploited for decades, many mines have to close because their resources are depleted. This is one essential part of the Gold Buyers Melbourne now.
At the same time, world demand continues to increase, not just because of jewelry, but because of the industry that uses gold as a basic material in the manufacture of various products or derived metals. Because of the industrialization of several countries, including Asians, the industry needs more gold each year.
Finally, gold has always been considered a refuge value, both by private and institutional investors. For this reason, banks’ gold reserves increase as risks in traditional financial markets increase. If we analyze these different factors and their possibilities for evolution, we see that the future of gold is already outlined. In fact, it is evident that the historically observed bullish phenomenon will only become more pronounced in the coming years.
Several modes of investment in gold:
To invest in gold, there are other methods than owning and storing physical gold, such a practice being, moreover, increasingly dangerous. It is also possible to trade on the price of gold through financial instruments, without having to physically stop the precious metal.
Investing in gold through online trading platforms offers even more interesting returns. Through CFDs, you can, in fact, invest on the micro-movements of this precious metal and make profits, either on the rise or on the fall of the price.
Do not ignore the fundamentals: technical levels are often well respected, but it is important that you know what makes this market move. It is always good to understand the global context. Are investors looking for or avoiding risks? How are the stock exchanges in the world? Is there an important economic announcement on the day? It is worth paying attention not to be caught with “pants in hand”,
Gold can punish traders without discipline: If you are not good at identifying areas or movements around them, gold can make you lose fast and in both directions. If you want to be successful trading gold you need a plan and follow your planning to the letter.
Final thoughts on Gold
Before finishing this post it is important to put some points:
- Gold is not for beginners,
- If you are struggling with Forex, gold can make it even more complicated,
- If you are not disciplined and act consistently, gold will ruin your account,
The intention here is not to scare anyone, but it is important to be honest and not get anyone to break the account. Our suggestion is that if you intend to trade this asset, do so in a demo account first, for at least 2-3 months.
Gold trading is much like Forex trading, if you use a spread betting platform. A gold trading strategy can include a mix of fundamental, sentiment or technical analysis. Advanced gold traders recognize that yellow metal is quoted in US dollars and will be responsible for its trend in their gold analysis.