Gold Forex Trading – Introduction
Gold has served as currency for many cultures across the world. Even today the currencies are secured by gold deposits. Trading gold has become easier due to technology and evolution in banking and trading procedures. In this article we will look at gold Forex Trading.
Gold and Currency
When you take a loan, you need to often give collaterals. Currencies of governments are often backed up in gold reserves. In this manner, no government can print money irresponsibly. So when you hold a banknote in your hand, it is actually backed up with a gold deposit.
When governments start being reckless, their currency falls in value. The gold however retains its value as the the international markets. We tend to measure gold rate in ounces per US Dollars. To be precise, the ounce is one troy ounce, which is equivalent to approximately 31.10 grams.
Who can trade gold
With the technology today, almost anyone can trade gold easily. Earlier you would need huge sums to trade gold. Now very small deposits are needed to trade it. In Malaysia, you need buy around 2 grams of gold to start trading with a nationalized bank. That is less than US$200.
How do I trade gold
Gold Forex Trading is different than buying gold from a jewelry store. The physical gold never reaches you. It is kept in safe with the bank. You need to buy the rights to the gold. A broker connects you to the trading platform and you can buy or sell gold similar to any stock or equity.
Why should I trade gold
While companies across the world are subject to ups and downs, gold has been consistently climbing. In the worst economic times, gold is seen as a safe haven or hedging your currency fluctuations.
Gold is also perceived across the world as a safe investment. Your broker is likely to give you higher leverage if you trade in gold. Gold is very easy to buy and sell. It does not have problems, related to the performance and the human resources troubles, that are common to every business.
Gold trading is normally 24hrs a day. You can take advantage of time zones to see trends and invest accordingly.
Technical analysis
It is recommended that you use technical analysis to trade in gold. You can use fundamental analysis to evaluate the influences on gold across the world. This is a very difficult task and you need a lot of resources. Technical analysis will help you earn profits in shorter periods. You can reinvest your money to create multiple movements of the price.
Summary
Gold Forex Trading is very lucrative. Gold is considered a safe haven in bad economic times. History shows that gold has been appreciating consistently. It is easy to start trading with a very small investment. Most brokers provide good leverage in gold trading. You can trade gold around the clock. It is recommended that you use technical analysis for gold Forex Trading.
