The gold trading
The gold is one of the most traded commodities of the world since man begin to trade thousands of years ago. In Forex, gold is symbolized as the XAU. The price of gold is measured by its weight, and refers to the value of an ounce in dollars. Transactions in gold prices, like those performed in foreign currency, are conducted via parallel or OTC (Over the Counter). That means that the transaction is handled between the parties without the need to a third-party that consolidate the trade. Such transactions are handled virtually, as they require no physical exchange of goods purchased and sold, considering gold as “XAU” as if it were another currency more. But the operations are performed only against the U.S. dollar (USD).
Usually, when the gold price increases, the price of U.S. dollar falls. For this reason, investors in gold use it to balance operating earnings and losses against the dollar. Furthermore, as gold tends to maintain its purchasing power over time, investors tend to buy the currency to counter the effects of inflation and changes in currency values. The purchasing power of many currencies has generally been declining as a result of the impact of rising prices of commodities and services.
In the Forex market, some investors also buy and sell gold for speculative reasons trying to make profits with small price fluctuations. However, the price of gold is very difficult to predict, since their use is mostly as a reserve of purchasing power, and therefore is subject to many monetary and psychological factors. Short-term investments to earn more than other types of investments can be very risky but very profitable at the same time.
The gold as one of the main commodities, is used as a basic asset for transactions of millions of dollars with multiple financial derivatives such as Futures contracts, CFD, Financial Options and others.
Reasons to invest in gold
- Gold is not affected by inflation or devaluation. Therefore, it does not lose its value every day, like paper money.
- Gold is considered an investment oasis. Gold has proven to improve performance in the years of crisis or war when alternative investments often fail.
- Gold is not under political control. No government can influence prices.
- Currently, the gold reserves are limited. This positive influence on price, as it tends to rise when the resource is limited.
- It’s an easy investment. Is a globally accepted currency and presents no great difficulties of change, or exaggerated charges.
- It is a safe and profitable investment. So far in 2009 the gold bears and a yield of 17%.
- Its main use is in reserve. There is very little gold for sale as it accumulates as a reserve, which is expected to increase its price.
- Allows various forms of investment. Bullion, certificates of deposit, futures and options on gold mutual funds.
- Gold is considered the best investment in times of crisis. Gold is considered a good liquid and its value always increases over time.
- The trader do not have to pay the VAT (Value Added Tax)
The following is a list of brokers and Forex brokers that are currently trading with gold in the spot market and through other investment instruments such as futures, options and others:
List of gold trading brokers
|AFM Forex||Forex broker||$100|
|Atlas Capital FX||Forex broker||$10|
|Liquid Markets||Forex broker||$2000|
|Forex CT||Forex broker||$500|
|Neto Trade||Forex broker||$100|
|Admiral Markets||Forex broker||$50|
|GCI Financial||Forex broker||$1000|
|IFC Markets||Forex broker||$1|