WHY TRADE GOLD?
Historically, gold has been a proven method of preserving value when a national currency was losing value. If your investments are valued in a depreciating currency, allocating a portion to gold assets is similar to a financial insurance policy. This year (2011), the climb in the price of gold above $1900 per ounce is due to many factors, one being that the dollar is losing value.
REASONS TO SAY YES TO TRADE GOLD
The dollar is weak and getting weaker due to national economic policies which don’t appear to have an end.
Gold price appreciation makes up for lost interest, especially in a bull market.
The last four years are the beginning of a major bull move similar to the 70’s when gold moved from $38 to over $1900!!
Central banks in several countries have stated their intent to increase their gold holdings instead of selling.
The trend of commodity prices to increase is relative to gold price increases.
Worldwide gold production is not matching consumption. The price will go up with demand.
Most gold consumption is done in India and China and their demand is increasing with their increase in national wealth.
Gold price reached all-time highs in 2011 and are still trending upward.
U.S. government economic policies over the past decade have systematically projected the U.S. economy down a road with uncontrollable federal spending and an uncontrollably increasing trade deficits. Both will cause the dollar to lose in international value and will increase the price of alternative investments, such as gold.
With the recent devaluation of many international currencies, the U.S. dollar was the international safe haven of last resort. We are seeing signs of this ending due to many financial factors, the most important one being a falling dollar.
There are over Four Trillion dollars ($4,450,000,000,000) of U.S. debt owned by foreigners which could be repatriated under certain conditions. This could cause a major decline in the value of the dollar and a soaring gold price.
Trading gold has been popular throughout history, once considered a lucrative business enterprise, requiring significant up-front capital. Nowadays, trading gold spot allows for investment to be made with relatively little capital, thanks to the leverage provided by brokerage firms.
The price of gold refers to its price per ounce in USD, and is measured in troy ounces (a troy ounce equals approximately 31.10 grams). Gold spot trading allow the possibility for traders to short sell and benefit from a falling market. You buy (go long) if you think prices will rise and you sell (go short) if you think they will fall.
One of the advantages to trading gold spot is margin trading provided by brokerage platforms forms such as ironfx.com, which allows traders to leverage a relatively small investment.
Date Price (Per Ounce) Action
Feb-2010 1050 Buy at 1050
Sep-2011 1900 Take Profit at 1900 & sell at 1900
Jun-2013 1200 Take profit with Buy 1200
Profit calculation Pips gain Amount Margin Percentage Per Month
Feb-2010 to Sep-2011 850 USD8500 USD300 2,833% 141%
Sep-2011 to Jun-2013 700 USD7000 USD300 2,333% 106%
(Note: Every USD1 go up in spot market, your profit is USD10).
If you buy gold bar or gold certificate, can you make so much? Physical gold have 30% off while you sell, they call it melting cost.
Gold Bar you need to have a secure place to hold and pay Safe Deposit cost to safekeeping.
Why not Trade Forex Gold?
Call me for detail for how to start Forex Gold Trading.
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