Today, gold is still the most popular precious metal commodity in the world. The gold market offers high liquidity and great opportunities for profit due to its unique position in the world economic and political system.
As one of the oldest currencies on earth, gold is traded by people from all walks of life, making it the asset with the largest market capitalization of $11 trillion.
There are many profitable reasons why we should put our investment in gold. Some of the reasons are as follows:
Safe in the long run: As a non-renewable metal, gold supplies depend on mining reserves which in fact will always decrease day by day. Therefore the value of gold tends to increase constantly in the long run.
Gold is also the mainstay of professional investors to protect themselves from the economic crisis, inflation, and securities market turmoil
Quite predictable: Gold is an asset with the best hedge against inflation, as well as one of the best defenses for an investor in the face of global economic crises and humanitarian challenges such as pandemics.
The gold price will most likely rise in that situation. On the other hand, the economy tends to recover, where gold is starting to lose its capitalization. The pattern is pretty clear, isn’t it?
Profitable: Of course, looking for profit is the main reason for every trader to invest. Therefore, gold is one of the best assets that can be traded. Gold is very good for long-term transactions, but you can also profit from the short-term, depending on what type of trader you are.
Best Time to Trade Gold
Timing is everything. Experienced traders know this. A good investment includes the right time to buy an asset.
Likewise with gold. This metal has certain characteristics in its movement in the market, that its price tends to rise when mankind experiences situations such as high inflation, global economic crisis, pandemic, USD depreciation, rising oil prices, and declining gold production in producing countries.
On the other hand, gold prices will decline if the economy strengthens, which is indicated by conditions such as low inflation, a stable economy, an increase in the USD, a strengthening in US interest rates, a decrease in oil prices, and an increase in the number of gold mining products.
For 2022, the forecast by Finex analysts predicts that gold will weaken during the first few months of the year due to rising interest rates and economic recovery. From the technical side, you should wait for the breakout and trade in the direction of the breakout.
Trading Gold on Forex Market
Gold transactions can be done conventionally (physically) by buying and storing gold in a place that we most trust to secure our valuable assets. However, there is another way to transact gold, namely online.
The advantage of trading gold online is that we minimize the opportunity to lose our gold physically.
As with online Forex trading, you can entrust your investments by using the services of a legal and trusted broker such as PT Finex Berjangka. In the Forex market, gold is paired with the USD currency, namely XAU/USD.
The concept is similar to Forex trading. So for example gold weakens, and the USD will rise.
When you trade the gold with Finex, you will enjoy various advantages such as low spreads (only 25 pips), low commissions, as well as being able to use a hedging strategy, where you can enter many times with smaller lot sizes (can be reduced to 0.01 lots).
We provide a means so that you can execute orders instantly with a stable and secure server. In addition, we regularly release information and news for those of you who want transactions for a short period of time.
Risks of Trading Gold on Forex
There is no investment without the risk that comes with it. It’s like a part of life, that you won’t achieve anything big easily.
Likewise, gold trading has a number of risks such as:
Leverage Risk: You must be able to take advantage of the leverage provided by the broker, not the other way around, by choosing the leverage that suits your abilities. Manage margin properly to save you from loss.
Interest Rate Risk: A country’s currency is affected by changes in interest rates.
Because you trade gold on Forex which is a currency trading arena, you need to pay attention to updates on changes in interest rates, in this case, USD, the currency of the United States that is paired with your gold.
Many people invest for the long term. Gold is the best choice for those of you who are looking far ahead. However, gold can also be profitable for those of you who want to take advantage of market movements in a short time.
Start trading gold with Finex by opening an account and making a deposit.
Finex is your trading companion you can always rely on for profit.