Reasons To Trade Gold Over Foreign Exchange

Discussion in 'General Trading Discussion' started by Dany Brown, Jan 9, 2017.

  1. Dany Brown

    Dany Brown Member

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    There are various kinds of markets where trading can be carried out. There are stock trading, futures trading, commodity trading, and even CFD trading. Now a puzzled reader might ask, “what does cfds mean?” By way of an answer, it should be stated that CFD is the acronym for “contract for difference”. Here, you deal in the difference between the starting and closing prices of a particular number of units of a commodity (known in trading language as the “contract”). The items of trade are mostly the same as those featuring in commodity trading: agricultural commodities, petroleum, crudes, meat and metals. Of metals, the one traded most frequently is gold. And this article is going to discuss the benefits of trading gold.

    Upon observing closely the process of gold trading, it would be seen that trading gold online is hugely similar to trading foreign exchange. The trading strategy is largely similar; you purchase at low prices and sell long. Similar to foreign exchange trading, you can trade gold by making use of the OTC method. Drawing a comparison with trading currencies, it can be said that dealing in gold trade is far less risky. Below are listed out a number of benefits which you get out of trading gold online:

    1. The Evaluation Would be Easy
    One of the foremost reasons to choose gold trading over forex is the fact that it does not require complex analysis. In addition, you don’t need to be extremely knowledgeable about the market, in order to be successful. And unlike in the currency trade, online gold prices are not easily affected by socio-political developments in the real world. This leads to a drastic reduction in the number of parameters, which are required to carry out the analysis.

    2. Simple Patterns Which are Also Foreseeable
    The gold price patterns are more predictable compared to the forex market. Because the patterns are so predictable, online trading of gold is becoming quite alluring for traders. And as stated before, there are very few factors which affect the patterns of gold, leading to its easy predictability. One thing needs to be kept in mind though: The value of the US dollar is one of the foremost things, which affect the price of gold.

    3. The System is Not Very Supervised
    An extremely important benefit of trading gold online is that, very little system supervision is required. Gold prices don’t show overnight reversals in trends, unlike what is seen during the trade of currencies. This ultimately means that very little time is required in monitoring the system. All you need to do is to dedicate a few minutes each day to check up on the system. When foreign exchange is being traded, there is a need to be up-to-date every time. A large number of individuals dealing in foreign currencies would be required to keep track of the system for every moment. This is very normal in terms of day trading considerations.

    In today’s world, people are always looking for great business opportunities. Keeping that in mind, gold trading and forex trading have traditionally been the most popular choices since eternity.
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I have been converting a certain US dollar amount to euros and using the euros to buy a little gold each week for many months now.
     
  3. longtermbull

    longtermbull Administrator Staff Member

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    I was always taught that gold becomes more popular in troubled times as a safe haven and falls as economic growth kicks in. If Donald Trump is successful with his economic plans, surely this would put pressure on the price of gold?
     
  4. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I think that if the dollar gets quite strong that metals could go down somewhat relative to the dollar. But I think that buying them lightly to moderately with weaker currencies as a hedge against global inflation and weakening of other currencies could be a good investment idea.
     

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