Home Education Gold Commodities – How to Track the Market

Gold Commodities – How to Track the Market

gold mining

Understanding how to make smart investments isn’t always an easy task given our complex global economy. With countries, technologies and commodities converging it is important to know how other market trends can affect your investments. Knowing which indicators play a role in gold investments can help investors anticipate market movements and help frame trading strategies for the short, mid and long term.

Mining Trends Influence Gold Commodities

As with most commodity investments, it is important to take a look at the industries that supply the goods. In the case of gold commodities, investors should take special interest in the mining industry. By following the mining market, you can see what the supply looks like, what global demand is and how you can tap into it.

When large projects and major investments are on the rise for mining companies, investors can often expect an increase in gold supply in the coming months and years. When volatility hits the stock market then investors can expect a spike in precious metal demand.

Performance of Other Investments

Equity and bonds generally have an inverse relationship with precious metals like gold. When these financial instruments take a dive, more investors and traders look to more tangible investments. As declines hit equity markets, gold commodities become more valuable because they are seen as relatively safe.

This is great news for investors looking to hedge their risks arising from stock investments. While stocks provide the safety net of dividends, it does not hedge against the potential overall decline of the stock market, regardless of how diversified your investments are. By mixing gold commodities in with equity investments traders can enjoy more stable performance over time.

Historical Correlations

Finding correlations for market indicators and the performance of gold is a great baseline of gold investing. Gold prices have historically seen an inverse relationship with interest rates in the US market. When domestic interest rates are low more investors turn to “safe” alternatives like gold and silver. This happens because low interest rates yield low returns on financial investments.

Tracking Prices

Tracking daily gold prices is easier than ever by using online gold trading. Current gold rates can be broken down into the following:

Spot Rate: Current price for actual gold. Rates change from minute to minute and are affected by current events as well as the volume purchased

Futures: Gold futures fluctuate day to day as investors lock in rates for the future in order to hedge expected risks

Both prices are important to track, but each investor has to determine which financial tool to pursue:

Stocks in gold mining and other precious metal production

Electronic Traded Funds (ETFs) that track gold prices and global mining development

Futures that can help investors hedge against currency fluctuations

Gold commodity itself, which is less common for day traders

By tracking the market, leading indicators and daily prices you can effectively select and trade gold by using one of the above financial tools. By mixing ETFs and stocks, everyday investors can gain adequate exposure to the gold market both directly through equity and indirectly with derivative investments.

Tracking the Market

Tracking the overall market is key when determining what the right investment for your financial goals is. Once you have established your baseline investment it is vital to maintain the right exposure over time. No one has a crystal ball, but monitoring historical trends, known correlations and evolving global events can improve your chances of success with gold commodities. Whether you’re looking to passively invest and hold for the long term or buy and sell to find faster profits you can access those opportunities in the gold commodity market.

How to Trade Gold Online

The Price of gold is constantly on the move. Take advantage of the daily price changes in gold with an online trading account. Some brokers offer bonuses of up to 30% on your first deposit (Terms and conditions apply). Open Gold Trading Account Here

The broker trading platform will also provide you with numerous charting tools and the ability to trade other commodities and currencies in addition to gold CFD’s. You might also want to begin trading with a demo account before attempting to risk any of your own money. That way you can practice trading with virtual money on the demo platform first.

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