Every woman wants to wear a gold necklace when going to a party. Gold is the ultimate gift when it comes to matters of love and beauty. Men buy gold rings and necklances for their girlfriends and wives. But have you ever thought of trading gold? In this article find out why gold investing can be the best thing for 2010!
Gold prices are reaching their historical highs. Uptrend in the gold market started a few years back and is expected to continue for more years. Recently gold prices peaked at $ 1200 per ounce before falling back around $ 1100. Why gold markets are hot right now? The main reason is the economic uncertainity in the global economy. In times of economic recession, gold becomes the ultimate safe haven investment for wealthy investors. They want to preserve their wealth and gold is considered to the best method to preserve wealth in times of political and economic uncertainity. Now, when the demand rises and the supply does not keep pace with the demand, the price of the commodity skyrockets. This is precisely what is happening to the gold prices!
Many countries have their international reserves in US Dollar. US Dollar is considered to be the international reserve currency. But the recent economic and financial turmoil in the US financial system has weakened the reserve status of US Dollar. People have started to have doubts about the strength of US Dollar. Countries like China that has more than a trillion dollar of reserves, India, Brazil and Russia want to hedge their international reserves by purchasing gold. Gold is still considered to be the ultimate currency. From time immemorial, gold has held this status and it will continue to do so in the 21st century.
So their are many big buyers of gold in the market but the supply of gold is limited. There are only a few gold mines in the world that cannot keep pace with the rising demand.China will purchase more than a hundred tons of gold in 2010. So will India, Russia and Brazil. They are big buyers. They need tons of gold. By just investing in something like 10-20 ounces of gold, you can reap the benefits when gold prices are going to rise futher.
US Dollar and gold prices are negatively correlated. What this means is that when US Dollar depreciates, gold prices appreciate and vice versa. Gold trading and forex trading combined can be highly lucrative as both hedge against each other.
Another commodity that is expected to skyrocket in the near future is silver. Just like gold, supply of silver is limited. But silver is widely used in the electronics indistry and host of other industries. With the economy coming out of recession, prices of silver are also expected to skyrocket.
So how do you go about investing in gold and silver? You can do it by investing in Gold ETFs or Commodities ETFs. You can also trade Gold Futures. Futures trading is risky for beginners but once your master it, it is considered to be the best day trading market. You can invest in gold stocks as well! Whatever, you decide you need to combine gold trading with forex trading as this combination is highly lucrative!
Source: http://mutualfunds-fordummies.com/gold-silver-etf-trading-gold-silver/
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