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Gold trading was popular in the days when both the Euro and US dollar were in jeopardy. Gold passed $1,800 an ounce and Bank of America Merrill Lynch raised its twelve month target price to $2,000. Remember that gold ended the 1990 at a little over $200 an ounce! Also remember that gold peaked in 1980 at over $600 an ounce in 1980, fell precipitously, and then went into hibernation for two decades. Gold trading, like trading other commodities, trading stocks, or trading derivatives such as futures and options contracts requires both fundamental and technical analysis to succeed. Although true gold bugs will say that gold is the best and only investment a look at gold prices tables over the years, shows us that gold advances and gold declines. It is with fundamental analysis of the factors that drive gold prices that traders can anticipate long term gold price movement. It with technical analysis tools such as Candlestick analysis that gold trading in the short term can become profitable.
Timing is All When Gold Trading
Although buying gold bullion in 2000 and holding it until would have been profitable there is more to investing in and Gold trading. Gold investing and gold trading can take a number of forms. Gold futures are traded on the COMEX, the commodity division of the New York Mercantile Exchange, NYMEX. Traders can profit from buying or selling futures directly and they can profit from buying or selling options on gold futures contracts. When gold passed $1,700 an ounce and closed in on $1,800 an ounce COMEX gold futures trading was active. In trading futures on gold bullion it is rare for traders to hold their contract until expiration. Traders rarely if ever deliver or take delivery of physical gold. Rather they exit their futures contract on or before the end of the contract period by executing the opposite trade, hopefully with a profit.