Gold trading is a popular way to make money in the financial markets. On the one hand, this is an opportunity to diversify the currency portfolio by adding precious metals to it. On the other hand, it is a good defensive asset, which even beginners who take trading courses know about. But still everyone wants to learn forex gold trading tips.
Trading in precious metals is possible on commodity and futures exchanges. The NYMEX exchange is well known for this. In addition, gold futures can be found on the Chicago Mercantile Exchange. But if the task is to make speculative earnings on the trading of precious metals, you can find an easier way, without the need to enter Western exchanges. Now every forex broker in the list of instruments can find not only oil, but also gold.
Features of gold trading: what you need to know?
It is worth noting that this precious metal is known among investors as a means of protection in troubled and uncertain times. When the market is relatively calm, and the situation in the economy is predictable, investors seek to increase profitability and choose stocks for this. They have a high profit potential, but the risk is also higher. If there comes a period of uncertainty, threats, market participants run away from risk. At this point, they transfer capital to safe assets, the main of which remains .Several rules follow from this:
Gold is sensitive to changes in risk appetite: it grows during periods of crisis and decreases when the situation stabilizes;precious metal quotes are inversely correlated to the US dollar. If the US dollar rises, for example, amid expectations of a Fed rate hike, gold will fall in price;before trading on the stock exchange, you need to know that the precious metal has high volatility. This is due to the peculiarities of the execution of contracts.
Also, when trading, technical analysis has proven itself well.
How to make money trading gold?
Having chosen a broker and deciding, for example, to trade through a forex company, it is important to choose a strategy and carefully calculate the risks. You can use the precious metal to diversify your speculative portfolio. Knowing the working hours of the currency exchange, you can choose the best trading sessions for intraday trading in currency pairs (this is usually the European and American session), as well as set gold positions.
Now, when trading gold, it is important to take into account not only fundamental relationships, but also technical analysis. The fact is that many factors are now working situationally. For example, currency intervention is practically not carried out now, and the dollar, with which gold is traded in inverse correlation, is also used by the market as a safe-haven asset, but situationally. In this case, multidirectional influence can lead to quotes fluctuating in a narrow range.