Gold Trading
Defined and Explained
Gold
Trading has been around for centuries and has also been
the keystone for economies through history. Gold
continues to have global financial impacts today.
Gold is
an also an important industrial commodity.
Gold
is an excellent conductor of electricity, is extremely
resistant to corrosion, making it critically important in
electronics and other high-tech applications.
Gold used in industrial applications
utilizes
close to 300 tons annually.
Gold Investing
Investing in gold is popular because of the more short
term requirements of gold speculators; there is
a thriving gold futures market. Gold is also
bought as a defensive investment. According to the National
Mining Association, mined gold supply is dwarfed by growing
global demand for gold. The best
estimates today indicate that the global market buys almost
5,000 metric tons of gold each year.
Global gold demand exceeds global gold
supply by approximately 60% annually, creating an
ongoing structural shortage situation.
Gold Trading
Prices/Rates
The
Gold
100 oz Contract Size is 100 fine troy ounces. The
tick size for gold is $.10 per troy ounce, or
$10 per contract.
Prices are quoted in dollars and cents per fine troy ounce.
The
mini Gold contract size is 33.2 fine troy ounces. The
tick size for this contract is 10 cents per fine troy ounce or
$3.32 per contract.
Aimed at world
and US markets, gold trading benefits from
recent UK and EU changes in VAT which has made investment in
gold exempt from VAT.
Gold Trading
Gold futures and options provide an important alternative
to traditional means of investing in gold such
as bullion, coins, and mining stocks.
Gold
contracts are also valuable trading tools for
industrial producers and users of the metal.
Gold
Traders can make thousands of percent in a gold bull
market (but lose the same).
Gold stock will also rise during
inflation... and during deflation, making it attractive to
potential traders who can read the market.
Major gold exchanges
·
The
Chinese Gold and Silver
Exchange Society in Hong Kong registered under this name
with the government in 1918, although trading had been taking
place with a degree of rules and regulations since 1910 (as the
“Gold and silver exchange co”).
·
The
COMEX division of
NYMEX began trading on 31st December 1974.
·
The
Istanbul Gold Exchange
began trading on 26th July 1995.
·
The
Shanghai Gold Exchange
began trading on 20th October 2002.
·
TOCOM
began trading on 23rd March 1982.
Gold Trading
Software
Ask any
gold trader, producer or general investor what trading
tools or types of financial analysis he is using to track
gold prices and you're probably going to hear a
list of different technologies and methods. However,
having the right tool for the job is important.
Trading software can be used to boost an existing
approach by supplying an inter-market perspective. The key to a
gold trading system is its ability to forecast
moving averages. One
of the better gold trading software products is
VantagePoint trading software.
This software can help “see” what is likely to happen in
the gold market before other traders (using
only single-market analysis) catch wind of it.
Gold Trading
Major Indicators and indices
Gold
100 ounce contract month closes are
2 Feb, 2 Apr, 2 Aug and 2 Oct; 5 Jun and 5 Dec.
Mini
Gold contract months are Jan, Feb, Mar, Apr, May, Jun,
Jul, Aug, Sep, Oct, Nov, Dec.
The last
trading day for gold is the business day
immediately before the last two business days of the contract
month.
Gold Trading
News
There are
multiple information sources that can give valuable input to a
gold trading decision.
-
American Metals Market
(AMM)
National Mining Association offers Information on
Gold Investing
World Gold
Council
The
Shanghai Gold Exchange (SGE) is
China/st1:place>'s first gold exchange
approved by the State Council and founded by the People's
Bank of China. The exchange performs the regulated functions
stipulated by Management Rules of Gold Exchange and
organizes gold transactions.
TThe
Dubai Gold & Commodities Exchange (DGCX) is the
exchange has been developed to facilitate the trade of gold
and commodities. Transactions on the DGCX will take place on
a state-of the-art electronic trading platform and is
expected to commence operations in Q3 of 2005.
The
Mid-America Commodity Exchange (MidAm) allows
traders to view prices and trade commodity futures contracts
for gold, platinum and silver on this exchange. Formerly
named the Chicago Board of Trade (CBOT).
The
New York Mercantile Exchange (NYMEX) is the world's
largest physical commodity futures exchange for metals such
as aluminum, copper, gold, palladium, platinum and silver
and energy. Quotes, charts, futures & options settlement
prices are all available online.
The
Tokyo Commodity Exchange (TOCOM) trades aluminum
and precious metals futures contracts for gold, silver,
platinum and palladium products on this continuous
computerized trading exchange.
The
Sydney Morning Herald in Australia/st1:country-region>
cover the financial and gold markets.
Gold Trading
History
For centuries,
gold
has been valued for its unique
blend of beauty and monetary value.
Nations have embraced
gold
as a measure of wealth and a
foundation of international exchange; individuals have sought to
possess
gold
as insurance against the
day-to-day uncertainties of paper money.
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