Futures Trading Talk : Gold Market Investing

Futures Trading Talk : Gold Market Investing

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To talk about futures trading, there will be various markets for us to care about. There will be traders trading on crude oil, natural gas, currencies, silver or gold, etc. However, whatever you trade, the markets can be interactive to each other. For example, changes in gold trading can cause changes in crude oil or others. That's why we need to know as much knowledge as possible. Since time is limited, today we will narrow the topic at Gold Market. We will learn some information about Gold Market Investing.

You see, gold is very popular right now. Advertisements or people talking about the precious metal are easily seen. There are commercials on TV called "cash for gold" that are replayed 12 times on CNBC. People even made fun of these advertisements with a super bowl commercial. Everywhere you go you will be able to hear someone talking about the precious metal, and it is no surprise that investors are flocking to this as a potential safety net in the distressed economic times we face today.

On September 11th, 2001, it all started back. That"s the time when the bull market for gold started to take shape. You know, after the terrorist attack of that day gold has never looked back. Gold prices started to shoot from $250 to $350 an ounce after the fear factor set in. A big number of investors started to move with interest to the metal after President Bush declared war against Iraq in an effort to combat against the Mideast turmoil.

There was another reason which caused or created the rise in gold. Do you know what was it? That was the weak USD. After the Euro"s inception in 1999 it has become the major currency of trade. The USD then started losing a lot of ground against major foreign currencies, especially the Euro. The USD started to fall harder and harder from 2004-2008. Gold prices rose at a quicker pace from 2005-07 increasing some 75% from $450 to $750 an ounce. At its weakest point the EURO/USD ratio was 1.60. This is when gold reached its peak of $1,030 in March 2008 and where the talk really started to take place. At the beginning of 2008, the United State entered into deep recession and growth had come to a standstill. When the credit crisis and mortgage lending business came down upon us, major world exchanges have lost more than 40% of their value. Traders then saw a downward move in Gold to$700 an ounce as the US Dollar staged a strong rally trading all the way down to $1.25 against the EURO. It wasn"t for long; however, traders quickly rushed back in to propel prices back to over $900 but the recession still loomed worldwide.

Gold price is now back above $950 an ounce and looking more like it may be headed to $1,000 than back to $800. The US can"t seem to get things straightened out with the bailout and stimulus plans, and the Dow Jones Industrial Average is setting lower lows almost at a daily pace. $1,000 an ounce seems like a short pit stop for higher prices in the near future.

About the Author:
You have just review one off the popular market - Gold. As a experience trader, you can recognize some factors which can influence on gold prices, and this analysis can help us a lot in our trading. To end of our talk, I would like to remind you a statement "Futures trading involves a substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results."



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