GOLD S SECRETS REVEALED. All You Need to Know to Trade Gold Successfully on the Financial Markets

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1 GOLD S SECRETS REVEALED All You Need to Know to Trade Gold Successfully on the Financial Markets

2 HIGH RISK INVESTMENT WARNING Trading Foreign Exchange (Forex) and Contracts for Differences (CFDs) is highly speculative, carries a high level of risk and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin and seek advice from an independent financial advisor if you have any doubts. Where we provide generic trading ideas, market commentary or other information this is incidental to your relationship with us. It is provided solely to enable you to make your own investment decisions and does not amount to advice. We give no representation, warranty or guarantee as to the accuracy or completeness of such information or as to the tax consequences of any Transaction including without limitation to loss of profit which may arise directly or indirectly from use of or reliance on such information.

3 WHAT GIVES GOLD ITS SHINE? We all know that gold is expensive, but why is it so valuable? Originally gold was valued because of its beauty, its rarity, and its use as jewelry and decoration. Today, it is one of the most commonly traded commodities. Gold was around long before the currency we currently use. Eventually a system of paper money developed similar to what we know today. When currency was first developed, the value of money was actually tied to a specific amount of gold. Essentially, there was a time when you could have walked into a national bank and exchanged a currency note for a set value of gold. Today, flat currency is no longer backed by gold in any country. So what makes this commodity such a golden trading opportunity? Similar to any other product, such as corn, oil, currencies, or stocks, gold s value is tracked and traded, but gold is particularly interesting to traders because of its trajectory, over an extended period. From gold rose 18% a year. Between 2005 and 2009 alone, gold rose from $540 to $1,200! Gold - London PM Fix 2000-Present To really simplify matters, think about the fact that gold has been valuable for millennia. The chances are that something which has been so valuable for so long will continue to be valuable in the future, and that s what makes gold one of the most attractive investments even when there are fluctuations

4 HOW DOES GOLD TRADING WORK? When you trade gold on the commodities market, you are not buying and selling actual pieces of gold. Rather, you are trading on the price of gold as it is set by market participants. Gold is traded in a pair, against the US dollar and the symbol for gold in trading is XAU. You can profit from market volatility whether the price of gold is rising or falling by going short or long, that is, selling or buying. Using leverage enables you to control a much larger share of gold than your funds may otherwise allow. This means that everyone, novice traders included, have access to the action without having to be a pro trader with hundreds of thousands in an investment portfolio. This is why the high leverage offered by Markets.com makes it a particularly popular broker. With 100:1 leverage available, you can trade $10,000 worth of gold with just $100. That gives you the potential to make significantly higher returns on your investment if your trade is successful. Gold simultaneously offers opportunities for short-term and long-term trading alike. While its steady growth is attractive to long-term traders, in the above graph, you can see that periods of high volatility can be of great benefit the short-term trader

5 HOW DO YOU SUCCESSFULLY TRADE GOLD? When trading on the commodity markets, you don t need to wait for a change in market direction, but can make a trade whether the market for gold is going up or down. Here are two examples to show how this would work How about if you think the price of gold will fall against the dollar? You see that gold is selling at $1,500 per Troy ounce and you believe that it will lower to $1450. In this case, you can use your $150 and your 100:1 leverage to sell a gold contract worth $15,000, the current price. If you have predicted correctly, then when the price of gold falls to $1,450 per Troy ounce you can close your position of $15,000 by buying gold contracts up to a total value of $14,500. In this case, you ve made a profit of $500. Let s say that you believe the price of gold is going to rise Right now, gold is selling at $1,500 per Troy ounce. You use your leverage of 100:1 to buy a gold contract worth $15,000 using just $150. You have predicted correctly, and the price per Troy ounce rises to $1,510. Now you sell your contract, which you bought at $15,000, for the new market value of $15,100 and therefore you ve made $

6 WHAT AFFECTS THE PRICE OF GOLD? Please note that other global factors need to be considered when determining the market movements, so awareness of world circumstances, such as regional instabilities as well as local cultures can give traders important insights into the direction that gold may go. Markets.com traders have 24 hour access to our dealing desk where they can get up-to-date information on the latest movements in the Gold market. While a variety of elements affect gold prices, one of the primary factors is the value of the dollar. The value of gold is usually denominated in dollars, so if no other market factors, at a given time, were impacting gold, a rise in the dollar would correspond with a fall in gold prices and vice - versa. Of course, gold is not just an idea; it is a real solid commodity that is used in many products, such as jewelry, electronic devices, and even medical devices so the demand for gold as an actual product also drives the price up or down. For example, India is one of the largest markets for gold and the traditional time for Indian weddings, October, has in many past years seen a rise in gold prices. SHOULD YOU TRADE GOLD? Gold is just one of many tradable assets, yet it alone has captured the world s imagination for generation after generation. It has a high level of volatility that makes it a lucrative asset in the commodities world. Gold can fluctuate steeply at any given moment, yet over the last decade, it has steadily grown in value. From its beauty to its utility, from its longevity to its volatility, gold is an attractive asset to trade, for short or long-term investment

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