Given its unique position in the global economic and political structure, gold is often a popular choice for all types of investors. Moreover, irrespective of whether the market is bearish or bullish, the gold market provides high liquidity, as well as a lucrative opportunity to earn profits.
Considering how high the prices of gold have been in the past decade, it is beneficial if you learn a trick or two of the commodities market in India and make the most of the rising gold prices.
Here are some of the commodity tips you should know when trading in gold:
What impacts gold prices: Gold is the most traded online commodity in the world. It is critical to understand what impacts the prices of the commodity and its dynamics. The sentiment, intensity and volume of gold trade are heavily influenced by catalysts like inflation, deflation, greed or fear, as well as supply and demand.Further, gold prices are also inversely correlated to dollar value. So, when trading in this popular commodity, have a keen eye for all catalysts and make an informed decision.
The crowd sentiments: Different people prefer gold for various purposes. There are retail participants, gold bugs, institutional investors, as well as the general population. Each section purchases this online commodity for a specific purpose, which pushes or pulls the demand and in turn, the gold prices.Hence, as a trader in gold, you should understand the emotions of each category well. It is advisable to invest in gold funds, which will comprise a basket of market instruments to match your risks-and-reward expectations.
The long-term history: Rising gold prices are attractive; however, it is wiser to pause and take a decision only after an in-depth study of its historical prices. You should understand the gold prices of the last several years to decode the pattern. Apart from understanding the trends, analyse the points where the price of the yellow metal dips for a long time.The objective is to evaluate the price points that you must watch out for when trading currently. Put a stop loss when the prices hit a point you suspect is the lowest, as per historical evidence.
The technical analysis: Apart from watching out for past prices, you should keep an eye for commodity news. Study the impact of economic changes, politics, industrialisation, etc. on the commodities market in India, specifically gold.Keep yourself informed about the national updates, as well as international events. Use the historical price analysis of gold to understand which events cause prices to rise and fall, and accordingly, frame trading strategies.
The RBI policies: The Reserve Bank of India, the governing authority for the Indian currency and the banking system, plays a critical role in gold trading. The RBI issues mandates and changes economic policies, which can heavily influence gold value.
Moreover, the RBI advises the government on issuing and restricting gold in the country. This, in turn, directly impacts gold prices.
By being mindful of these commodity tips and you will be able to make wise gold trading decisions to suit your objective, risk profile and requirements. If all of this sounds intimidating to you, you can always seek help from professional investment advisors.
izzy806
yousharknotpass
origamiaround
blakekathryn
gummygunk
snowghoul
tangentwithtanner
romaincrisis
dededos
stormborns
baratheonpilled