Trading Gold

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Trading Gold

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.

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Trading Gold

  1. 1. www.CandlestickForums.comwww.CandlestickForums.com Trading GoldTrading Gold
  2. 2. www.CandlestickForums.comwww.CandlestickForums.com Trading gold is popular these days asTrading gold is popular these days as both the Euro and US dollar are inboth the Euro and US dollar are in jeopardy.jeopardy.
  3. 3. www.CandlestickForums.comwww.CandlestickForums.com Gold has passed $1,700 an ounce andGold has passed $1,700 an ounce and Bank of America Merrill Lynch hasBank of America Merrill Lynch has raised its twelve month target priceraised its twelve month target price to $2,000.to $2,000.
  4. 4. Before We Continue…Before We Continue… Click the links below to get yourClick the links below to get your FREE training materials.FREE training materials. Free Weekly Investing WebinarsFree Weekly Investing Webinars Don’t miss these free training events!Don’t miss these free training events! http://www.profitableinvestingtips.com/free-webhttp://www.profitableinvestingtips.com/free-web Forex Conspiracy ReportForex Conspiracy Report Read every word of this report!Read every word of this report! http://www.forexconspiracyreport.comhttp://www.forexconspiracyreport.com
  5. 5. www.CandlestickForums.comwww.CandlestickForums.com Remember that gold ended the 1990Remember that gold ended the 1990 at a little over $200 an ounce! Alsoat a little over $200 an ounce! Also remember that gold peaked in 1980remember that gold peaked in 1980 at over $600 an ounce in 1980, fellat over $600 an ounce in 1980, fell precipitously, and then went intoprecipitously, and then went into hibernation for two decades.hibernation for two decades.
  6. 6. www.CandlestickForums.comwww.CandlestickForums.com Trading gold, like trading otherTrading gold, like trading other commodities, trading stocks, orcommodities, trading stocks, or trading derivatives such as futurestrading derivatives such as futures and options contracts requires bothand options contracts requires both fundamental and technical analysisfundamental and technical analysis to succeed.to succeed.
  7. 7. www.CandlestickForums.comwww.CandlestickForums.com Although true gold bugs will say thatAlthough true gold bugs will say that gold is the best and only investmentgold is the best and only investment a look at gold prices tables over thea look at gold prices tables over the years, shows us that gold advancesyears, shows us that gold advances and gold declines.and gold declines.
  8. 8. www.CandlestickForums.comwww.CandlestickForums.com It is with fundamental analysis of theIt is with fundamental analysis of the factors that drive gold prices thatfactors that drive gold prices that traders can anticipate long term goldtraders can anticipate long term gold price movement.price movement.
  9. 9. www.CandlestickForums.comwww.CandlestickForums.com It with technical analysis tools such asIt with technical analysis tools such as Candlestick analysis that trading goldCandlestick analysis that trading gold in the short term can becomein the short term can become profitable.profitable.
  10. 10. www.CandlestickForums.comwww.CandlestickForums.com Although buying gold bullion in 2000Although buying gold bullion in 2000 and holding it until would have beenand holding it until would have been profitable there is more to investingprofitable there is more to investing in and trading gold.in and trading gold.
  11. 11. www.CandlestickForums.comwww.CandlestickForums.com Gold investing and gold trading canGold investing and gold trading can take a number of forms.take a number of forms.
  12. 12. www.CandlestickForums.comwww.CandlestickForums.com Gold futures are traded on the COMEX,Gold futures are traded on the COMEX, the commodity division of the Newthe commodity division of the New York Mercantile Exchange, NYMEX.York Mercantile Exchange, NYMEX.
  13. 13. www.CandlestickForums.comwww.CandlestickForums.com Traders can profit from buying orTraders can profit from buying or selling futures directly and they canselling futures directly and they can profit from buying or selling optionsprofit from buying or selling options on gold futures contracts.on gold futures contracts.
  14. 14. www.CandlestickForums.comwww.CandlestickForums.com With gold having passed $1,700 anWith gold having passed $1,700 an ounce and closing in on $1,800 anounce and closing in on $1,800 an ounce COMEX gold futures trading isounce COMEX gold futures trading is active.active.
  15. 15. www.CandlestickForums.comwww.CandlestickForums.com In trading futures on gold bullion it isIn trading futures on gold bullion it is rare for traders to hold their contractrare for traders to hold their contract until expiration.until expiration.
  16. 16. www.CandlestickForums.comwww.CandlestickForums.com Traders rarely if ever deliver or takeTraders rarely if ever deliver or take delivery of physical gold.delivery of physical gold.
  17. 17. www.CandlestickForums.comwww.CandlestickForums.com Rather they exit their futures contractRather they exit their futures contract on or before the end of the contracton or before the end of the contract period by executing the oppositeperiod by executing the opposite trade, hopefully with a profit.trade, hopefully with a profit.
  18. 18. www.CandlestickForums.comwww.CandlestickForums.com Gold exchange traded funds, ETF, areGold exchange traded funds, ETF, are another possibilities for trading gold.another possibilities for trading gold.
  19. 19. www.CandlestickForums.comwww.CandlestickForums.com The value of the ETF tracks the valueThe value of the ETF tracks the value of gold bullion.of gold bullion.
  20. 20. www.CandlestickForums.comwww.CandlestickForums.com Gold ETF shares trade like stocks.Gold ETF shares trade like stocks.
  21. 21. www.CandlestickForums.comwww.CandlestickForums.com Traders can use Candlestick patternsTraders can use Candlestick patterns to follow ETF prices as they wouldto follow ETF prices as they would use Candlestick stock charts to followuse Candlestick stock charts to follow ordinary stocks.ordinary stocks.
  22. 22. www.CandlestickForums.comwww.CandlestickForums.com As with ordinary stocks traders canAs with ordinary stocks traders can profit by buying options or sellingprofit by buying options or selling options on Gold ETF.options on Gold ETF.
  23. 23. www.CandlestickForums.comwww.CandlestickForums.com A means of leveraging capital inA means of leveraging capital in trading gold is buying stocks andtrading gold is buying stocks and selling stocks of gold miningselling stocks of gold mining companies.companies.
  24. 24. www.CandlestickForums.comwww.CandlestickForums.com Gold stocks commonly rise faster thanGold stocks commonly rise faster than the price of gold in a rising market.the price of gold in a rising market.
  25. 25. www.CandlestickForums.comwww.CandlestickForums.com They also fall faster in a falling market.They also fall faster in a falling market.
  26. 26. www.CandlestickForums.comwww.CandlestickForums.com Options trading provides both leverageOptions trading provides both leverage and management of investment riskand management of investment risk in trading gold.in trading gold.
  27. 27. www.CandlestickForums.comwww.CandlestickForums.com Buying puts or buying calls on goldBuying puts or buying calls on gold futures, ETF, or mining stocks limitsfutures, ETF, or mining stocks limits investment risk to the price of theinvestment risk to the price of the options contract.options contract.
  28. 28. www.CandlestickForums.comwww.CandlestickForums.com Of course options writers, commonlyOf course options writers, commonly limited to large investment houses,limited to large investment houses, can sustain substantial losses, whichcan sustain substantial losses, which is why the business of writingis why the business of writing options is often limited to largeoptions is often limited to large institutional traders with very deepinstitutional traders with very deep pockets.pockets.
  29. 29. www.CandlestickForums.comwww.CandlestickForums.com With US interest rates near zero and aWith US interest rates near zero and a solution to dealing with thesolution to dealing with the monumental US debt still not in sightmonumental US debt still not in sight trading gold is attractive.trading gold is attractive.
  30. 30. www.CandlestickForums.comwww.CandlestickForums.com Smart traders will watch theSmart traders will watch the fundamentals and can usefundamentals and can use Candlestick chart formations inCandlestick chart formations in profitably trading gold as goldprofitably trading gold as gold bullion, ETF, mining stocks, options,bullion, ETF, mining stocks, options, or futures.or futures.

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