14kt yellow gold medallion – Photo Courtesy: Mark Somma
Gold is rapidly gaining local and international attention for a number of reasons. Trading gold has been a popular and historical trend since the 19th century because gold provides a sense of security and a significant return on investment. The current gold price is always the focus of trading throughout the day. Gold is available in a variety of sources including traditional bars, bullion coins, stock trading exchange products, jewelry, and gold accounts. Alternate forms of obtaining this precious metal consist of purchasing gold shares through a gold mine or after the fortune of an inheritance.
Trading Your Scrap Gold
The most commercially accessible form of trading gold for the general public is taking unwanted or broken jewelry to a buyer. Customers can take their gold jewelry to a local storefront and get a cash offer at the latest price in exchange for their metal. This form of trade is convenient for investors because the challenging economy and overwhelming unemployment rate attracts people to sell their jewelry for quick cash. Buyers often melt down broken and unwanted pieces of jewelry and sell them to manufacturers or recycle it for more cash. Another popular quick cash trend is selling gold coins to take advantage of the current high price. Selling jewelry and gold coins are common sources of trading gold for people who are unfamiliar with or have no desire to participate in online gold trading.
Online Gold Trading
Trading gold online requires a significant amount of investment knowledge, access to a real time gold price and understanding what affects it. Trading decisions must also factor in the results of technical analysis, the gold market and averages. The most popular approaches are online and spot trading. Gold is frequently traded online by buying or selling Exchange Traded Funds (ETF) such as the SPDR Gold Trust (GLD). Trading in ETFs is an increasingly popular method of investing in gold because there is an option to go short. When the market trends display a positive indicator in technical analysis and trends suggest that a gold investment is favorable, confirm this by checking the current gold price and major trends. The purpose of trading gold online is to reap substantial return on investment. This method is comparable to playing the stock market.
Spot trading is another highly technical approach utilized by investors. The history of spot trading surrounds itself around the international compilation of gold trading around the globe. The price represents the outcome of the meeting of the minds that has occurred during the twice daily teleconference among corporate bullion trading firms involved in the London bullion market. The gold price is a composition of global gold trading and this is represented over a historical perspective.
The decision to participate in online or spot trading is an important financial decision that involves a clear understanding of gains and losses. These highly technical approaches to trading gold and evaluating the gold price should be left in the hands of business professionals who understand the market flux. Investors are generally the best sources of information regarding all types of financial securities and investment options. Investment firms employ brokers resulting in a considerable amount of leverage. The advantage of leverage may allow them to buy a substantial amount of gold for less money. Reaping the return on investment is the goal when trading gold products. Like the stock market, understand that the gold market is always subject to speculation and you could lose a tremendous amount of investment if the market experiences an unprecedented fall. The market is generally perceived as being a steady investment vehicle because of the stable nature of the historical price. The price of gold does not appear to be trending in a downward direction.
Therefore, many individuals view this as a fiscally responsible decision when considering an investment.
Written by: Phil Weatherburn, trader of gold and silver markets.