subject: Speculating on the Gold Futures Markets [print this page] Speculating on the Gold Futures Markets Speculating on the Gold Futures Markets
The price of Gold looks to be benefiting from all the doom and gloom in the headlines and the bulls will be hoping for a return to the $1,250 area soon. If this happens then naturally the bulls will want to see if there is enough momentum to take the precious metal to fresh new record highs.
Nevertheless anyone speculating on the gold market to go up should remain wary of the sort of corrections that can be had to the downside. The last correction was a price retracement of 6.5%.
Looking at the downside, the bears will be hoping for a break of the current levels. Although even if a break is achieved there is price support at $1,204/$1,205 and also at $1,200 itself.
Taking a step back from the day trading market and looking at the underlying trend, the precious metal has continued to be a favourite for investors around the world, particularly with Exchange Traded Funds buying more and more bullion. As stocks in the US and Europe have remained volatile, gold has retained its safe-haven status and continues to appeal to those investors looking for lower risk investments.
If you are looking to trade gold, or even if you already speculate on the metal, then gold spread betting offers some interesting features and is worth considering.
With gold spread betting naturally you can speculate on the price of gold to up, however you can also speculate on gold to go down. It should also be noted that spread betting companies tend not to charge broker's fees or commissions.
Although before I go further I should say that spread betting is a leveraged product and carries a high level of risk to your capital. Both your profits and losses are magnified, so with spread betting you can lose more than you initially invested. Please ensure that spread betting matches your investment objectives and familiarise yourself with the risks involved. Where necessary, seek independent advice.
Having said all this, spread betting is becoming increasing popular. In addition to the above plus points, a key advantage is that financial spread betting offers a wide variety of financial markets on which you can speculate including commodities like gold but also stock markets indices, currencies and individual shares from around the world.
The fact that some markets like gold can be traded 24 hours a day, 5 days a week, sets spread betting apart from more traditional stock trading. Another advantage is that there are a wide variety of ways in which to place trades; spread trades can be made online, over the phone, or even on some new mobile applications.
If you are unsure then it is worth having a look at a spread betting demo account. A number of firms like paddypowertrader offer these for free. A demo account simply lets you trade the markets with virtual funds. In other words, it is risk free. If you are less familiar with this form of trading then a little practice should help you understand the basics.
