The Gold Trading Strategy
Gold is one of those assets which usually requires a whole lot of money to trade in. In the stock market you usually need at least 10,000 dollars to really trade in gold, or even just to be able to trade in gold.
However many people are now switching to trading gold in the world of binary options. This is because investors can make trades with amounts as low as 25 or even 5 dollars, thus reducing the amount of capital needed and also the risk of losing all of your money at once.
Trading in gold is really not that hard, but you do need to focus on a couple key underlying assets to figure out where the price of gold is going.
Gold is a fairly stable asset that usually runs on an upward curve in terms of its price. For the last 15 years the price of gold has been steadily rising. This is mainly due to the laws of supply and demand. More people want gold and at the same time the average amount of gold per person looking to invest in it or buy it is increasing. This is combined with the increasing scarcity of gold per capita, thus the result is the ever increasing value of gold.
The bottom line is that gold is firmly intertwined into the American economy, and the price of gold often rests firmly in the hands of the American market. Therefore, to make profitable trades in gold you will need to identify key indicators in the U.S economy which are related to gold prices.
Indications Of Rising Gold Prices
There are a few different indicators which you can use to accurately predict the price of gold, indicators which are very reliable.
The U.S Dollar’s value – The U.S Dollar and gold have an inverse relationship and they have had this relationship for decades now. It is pretty much a sure thing that when the price of the Dollar goes up the price of gold goes down, and vice versa. Therefore if you know that the price of the Dollar is going to drop, you can place a trade accordingly in regards to gold.
Interest Rates – Another indicator of the price of gold is the U.S federal reserve’s interest rates. When the federal government lowers interest rates to promote investing and trading, the price of the U.S Dollar will fall. As we just talked about, when the price of the Dollar falls, the price of gold goes up, and thus you can place your trades accordingly.
Events – The final thing you want to look for in order to confirm an uptrend in the price of gold is any major event that may affect the U.S economy. With a growing deficit will come the rising price of gold. Therefore, if you spot an event that is going to throw the U.S economy into a downward trend, you can rest assured that gold prices are going to rise, thus allowing you to make an accurate trade in gold.
Keep in mind that there are various indicator charts which will help you reaffirm your assumptions about the price of gold. One of the most reliable charts which you can use to affirm the upward trend of gold prices is the MACD chart.