Gold is the metal that has been widely used on markets for a very long time and have not lost its value. First of all, spot gold trading is valuable, because there are not abrupt changes of price. New York and London exchanges are the leading platforms for trading with gold. At the same time, on Forex currency market you can trade this spot metal without geographical limitations.
Peculiarities of trading with spot gold:
- Remember that gold quotes are fixed twice a day: 10:30 am and 3 pm, London time. So, the best possible time for trading with gold is the period in between.
- Correlation between gold and US dollar. For example, if gold conveys clearly expressed bullish mood, that is to say, longs dominate on the market which means that bearish mood will work for the US dollar where you are better to put short.
- Dependance of gold rate on fundamental factors. For example, if crisis is about to occur in developed countries, gold starts moving upwards. The reason is that investors withdraw their capital from the economy to contribute to more stable assets.
- Gold has a rather high spread.
- Credit leverage for gold trading is much lower than currency leverage.
Based on the above-mentioned, we can conclude that spot gold trading is a perfect alternative to currency market.
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