Gold Price Forecast, Trends
Gold Price – Live Gold (XAU) Rate Chart, Price Forecast
How to Trade Gold (GLD, GDX)
Whether it's behaving like a bull or a bear, the gold market offers high liquidity and excellent opportunities to profit in nearly all environments due to its unique position within the world’s economic and political systems. While many folks choose to own the metal outright, speculating through the futures, equity and options markets offer incredible leverage with measured risk.
Market participants often fail to take full advantage of gold price fluctuations because they haven’t learned the unique characteristics of world gold markets or the hidden pitfalls that can rob profits. In addition, not all investment vehicles are created equally: Some gold instruments are more likely to produce consistent bottom-line results than others.
Trading the yellow metal isn’t hard to learn, but the activity requires skill sets unique to this commodity. Novices should tread lightly, but seasoned investors will benefit by incorporating these four strategic steps into their daily trading routines. Meanwhile, experimenting until the intricacies of these complex markets become second-hand.
What Moves Gold
As one of the oldest currencies on the planet, gold has embedded itself deeply into the psyche of the financial world. Nearly everyone has an opinion about the yellow metal, but gold itself reacts only to a limited number of price catalysts. Each of these forces splits down the middle in a polarity that impacts sentiment, volume and trend intensity:
Market players face elevated risk when they trade gold in reaction to one of these polarities, when in fact it's another one controlling price action. For example, say a selloff hits world financial markets, and gold takes off in a strong rally. Many traders assume that fear is moving the yellow metal and jump in, believing the emotional crowd will blindly carry price higher. However, inflation may have actually triggered the stock's decline, attracting a more technical crowd that will sell against the gold rally aggressively.
Combinations of these forces are always in play in world markets, establishing long-term themes that track equally long uptrends and downtrends. For example, the Federal Reserve (FOMC) economic stimulus begun in 2009, initially had little effect on gold because market players were focused on high fear levels coming out of the 2008 economic collapse. However, this quantitative easing encouraged deflation, setting up the gold market and other commodity groups for a major reversal.
That turnaround didn’t happen immediately because a reflation bid was underway, with depressed financial and commodity-based assets spiraling back toward historical means. Gold finally topped out and turned lower in 2011 after reflation was completed and central banks intensified their quantitative easing policies. VIX eased to lower levels at the same time, signaling that fear was no longer a significant market mover.
Understand the Crowd
Gold attracts numerous crowds with diverse and often opposing interests. Gold bugs stand at the top of the heap, collecting physical bullion and allocating an outsized portion of family assets to gold equities, options, and futures. These are long-term players, rarely dissuaded by downtrends, who eventually shake out less ideological players. In addition, retail participants comprise nearly the entire population of gold bugs, with few funds devoted entirely to the long side of the precious metal.
Gold bugs add enormous liquidity while keeping a floor under futures and gold stocks because they provide a continuous supply of buying interest at lower prices. They also serve the contrary purpose of providing efficient entry for short sellers, especially in emotional markets when one of the three primary forces polarizes in favor of strong buying pressure.
In addition, gold attracts enormous hedging activity by institutional investors who buy and sell in combination with currencies and bonds in bilateral strategies known as “risk-on” and risk-off.” Funds create baskets of instruments matching growth (risk-on) and safety (risk-off), trading these combinations through lightning-fast algorithms. They are especially popular in highly conflicted markets in which public participation is lower than normal.
Read the Long-Term Chart
Take time to learn the gold chart inside and out, starting with a long-term history that goes back at least 100 years. In addition to carving out trends that persisted for decades, the metal has also trickled lower for incredibly long periods, denying profits to gold bugs. From a strategic standpoint, this analysis identifies price levels that need to be watched if and when the yellow metal returns to test them.
Gold’s recent history shows little movement until the 1970s, when following the removal of the gold standard for the dollar, it took off in a long uptrend, underpinned by rising inflation due to skyrocketing crude oil prices. After topping out at $2,076 an ounce in February 1980, it turned lower near $700 in the mid-1980s, in reaction to restrictive Federal Reserve monetary policy.
The subsequent downtrend lasted into the late 1990s when gold entered the historic uptrend that culminated in the February 2012 top of $1,916 an ounce. A steady decline since that time has relinquished around 700 points in four years; although in the first quarter of 2016 it surged 17% for its biggest quarterly gain in three decades, as of December 2017, it's trading at $1,267 per ounce.
Choose Your Venue
Liquidity follows gold trends, increasing when it’s moving sharply higher or lower and decreasing during relatively quiet periods. This oscillation impacts the futures markets to a greater degree than it does equity markets, due to much lower average participation rates. New products offered by Chicago’s CME Group in recent years haven’t improved this equation substantially.
CME offers three primary gold futures, the 100-oz. a contract, a 50-oz. mini contract and a 10-oz. a micro contract, added in September 2011. While the largest contract's volume was over 67.6 million in 2017, the smaller contracts were not as widely traded; 87,450 for the mini and .05 million for the micro. This thin participation doesn’t impact long-dated futures held for months, but strongly impacts trade execution in short-term positions, forcing higher costs through slippage.
The SPDR Gold Trust Shares (GLD) shows the greatest participation in all types of market environments, with exceptionally tight spreads that can drop to one penny. Average daily volume stood at 2.34 million shares per day in December 2017, offering easy access at any time of day. CBOE options on GLD offer another liquid alternative, with active participation keeping spreads at low levels.
The VanEck Vectors Gold Miners ETF (GDX) grinds through greater daily percentage movement than GLD but carries a higher risk because correlation with the yellow metal can vary greatly from day to day. Large mining companies hedge aggressively against price fluctuations, lowering the impact of spot and futures prices, while operations may hold significant assets in other natural resources, including silver and iron.
Trade the gold market profitably in four steps. First, learn how three polarities impact the majority of gold buying and selling decisions. Second, familiarize yourself with the diverse crowds that focus on gold trading, hedging, and ownership. Third, take time to analyze the long and short-term gold charts, with an eye on key price levels that may come into play.
Finally, choose your venue for risk-taking, focused on high liquidity and easy trade execution.
What is a business account?
The merchant account opens the door to the world of financial markets and gives you the opportunity to trade with a wide range of tools, the most popular of which is:
- CFD commodities
- Cryptocurrency CFD (Bitcoin, Ethereum, Lightcoin, Ripple, News and Rates on Cryptocurrency)
A trading account allows you to potentially benefit from bull movements like a bear, it is a real advantage to take advantage of all the conditions of the financial markets.
Opening a merchant account is to open a separate account with a bank whose capital will be dedicated to your speculation on the financial markets and which will allow you to trade with a financial intermediary, the agent of your choice.
Trade CFDs on instruments from the world's most popular markets.
How can I open a Demo account?
You can choose to open a Demo account during your registration process by clicking on “Demo Mode” in the “Select Account Mode” window. You can also switch back from Real Money mode to Demo mode by clicking on “Switch to Demo Mode” in the main platform screen or from the app’s menu.
1. Open an account
To trade on oil prices with Plus500, you’ll need to open an account. It takes a matter of minutes, can be done entirely online, and there’s no obligation to fund once you’ve finished your application.
However, you will need to fund before you place your first trade. Funding a CFD trading account is simple – you can use your debit or credit card
If you’d like to try out oil trading without the risk of losing any capital, you can open a demo account instead.
2. Find your first opportunity
- You can use your Plus500 account to trade Brent Crude and WTI (Called US Light Crude on the platform), as well as Heating Oil, Natural Gas and No Lead Gasoline. And you can access a variety of tools to help you identify the right time to open your first position, including:
- Oil trading signals, which tell you when opportunities arise with details on how to take advantage
- Alerts, which notify you when certain conditions you’ve set have been fulfilled
- Technical indicators, including MACD, Bollinger Bands and RSI
- Find out more about the Plus500 Trading platform.
3. Open your position
Once you’ve decided the market you want to trade, you can open your position on Plus500 web platform, or one of our mobile trading apps.
Open the deal ticket to place your trade. First of all you’ll enter your stake, which dictates the profit or loss you’ll make when the market moves. You can also choose to add a stop or a limit here, which will automatically close your position once it hits a certain level.
Bear in mind, though, that a basic stop loss does not guarantee your position will close at the exact level you specify – if the market suddenly gaps beyond your stop level, it’s possible your position will be closed at a worse level than requested.
If you think oil is going up in value, then ‘buy’ your chosen market. If you think it’s headed down, then ‘sell’ it.
4. Monitor and close your position
Now your trade is open, you’ll want to keep a close eye on it – or use the appropriate monitoring tools – and decide when the right time is to either cut your losses or take your profits. You can also add, remove or amend any stops or limits once your position is open.
To close a trade, you just click on your position and trade in the opposite direction to when you opened it. So if you bought oil, then you’d sell it. If you’d sold oil, then you buy it.
Your profit or loss is determined by deducting the price at which you opened the position from the price at which you closed it, and multiplying the result by your position size. If you bought the market at the outset, then a positive figure indicates a profit and negative one a loss. If you sold it, then it's the opposite.
Step 1 – Open an Account
To open an account with Plus 500 - is a simple process, click here to continue. The registration is fast and easy. All needs to be done is to fill your email address and password.
Step 2 – Verify Your Account
In order to activate your account, you must provide the required documentation. Plus500 provides a simple and fast online platform which makes it an instant process. Customers are required to verify their accounts for identification and security purposes in accordance with Plus500 due diligence process.
Plus500 offers CFD trading in Forex, stock indices, individual equities, commodities, cryptocurrencies, ETFs and options. Plus500 was the first broker to introduce a Bitcoin CFD (2013). The company does not charge commissions on any of its trades. All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500's WebTrader platform. Large volume traders do not get a trading discount at Plus500. The spread is the same whether you trade one lot or one thousand lots. There are no charges for normal withdrawals or terminating an account. Inactivity fees kick in after an account has been idle for three months. Beginning traders can open an account with as little as GBP 100.
WebTrader is simple and easy to use and the layouts will feel familiar. Traders can choose from among more than 2,000 instruments, analyze their selection on a customizable technical analysis chart and place their trade in just a few clicks, all within the same window. Traders can also set price-based alerts on instruments they are following, and WebTrader will notify them via email or SMS text once the price objective has been reached.
The mobile app includes all of the same functionality clients can use in the desktop version to analyze and research trading opportunities. Clients can use conditional orders, track their accounts and receive trading alerts. The dynamic charts can be expanded to full screen to provide better clarity during the technical analysis process. Clients can also deposit and withdraw money from within the mobile app.
Plus500 has been in the CFD business since 2008. They are registered in the UK and licensed by the Financial Conduct Authority (FRN 509902). The company offers CFD trading in Forex, stock indices, individual equities, commodities, cryptocurrencies, ETFs and options. Plus500 was the first broker to introduce a Bitcoin CFD (2013). The company does not charge commissions on any of its trades. All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500's WebTrader platform. Plus500 Ltd. (PLUS.L) is a publicly traded company on the AIM section of the London Stock Exchange (since 2013) with a GBP 1.01 billion market capitalization and clients in more than 50 countries around the world.
Up to 80.6% of retail investor accounts lose money when trading CFDs with Plus500. You should take into account whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs, regardless of provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.