What are gold futures?
A gold futures is a contract whereby the parties agree to buy or sell gold at a specific price in the future. It is a useful tool in a trader's arsenal.
Gold futures allow traders to protect themselves against the potential risks associated with gold price fluctuations. Gold futures are bought or sold at a fixed price for a future date to lock in the price of gold well in advance. This helps prevent possible adverse price movements.
Gold futures also provide an opportunity to invest in gold without the need for physical possession of the metal. Traders can speculate on price movements in gold. Profit from the difference in the price of gold futures.
One of the pros of the gold futures price is its high liquidity. Traders can buy or sell futures quickly. Gold could have less liquidity than futures.
Finally, trading gold futures helps determine the current market price. By trading futures, supply and demand are formed, which affects the price of gold. A gold futures has a ticker, which is a short form. It looks like this: GC.
Gold futures price forecast
Gold prices have been rising and setting records over the past few years. The price per troy ounce has passed the $2,000 mark. In comparison, twenty years ago the price did not even reach $500. But will the price of gold continue to rise this year and next?
The answer to this question has divided analysts. Experts from Saxo Bank are predicting that the price of gold could go beyond the shocking $3,000 per troy ounce mark. However, the agency Fitch Rating, on the contrary, predicts a decrease in the price of gold. Many analysts agree that in the long term for a few years, we should expect rise in price of gold by 20-25%.
What do the prices of gold depend on?
As in the case of other asset prices, gold prices and gold futures depend on several factors:
- supply and demand. If the demand for gold exceeds its supply, prices tend to rise;
- economic conditions. When there is increased inflation or uncertainty in the markets, investors may turn to gold as a safe haven
- Political instability; In such an environment, investors may increase their investment in gold in search of value preservation.
- Correlation with the US dollar; Gold and the US dollar are usually inversely correlated. When the dollar goes down in value, the price of gold usually goes up, and vice versa.
- the actions of central banks. The volume of gold reserves and transactions can have an impact on prices.
It is important to note that gold prices can be subject to fluctuations and market forces, and investors should exercise caution and awareness when making decisions about trading gold.
Trading gold in Forex
Traders on Forex can trade gold and gold futures. All they need to do is follow a few simple steps. Firstly, you need to choose a reliable Forex broker which offers gold trading. Open an account with this broker and follow the verification procedure.
The next step is to analyze the gold futures chart, learn the news and get an idea of the market's condition. Based on this data you should choose a trading strategy. It can be either a short-term strategy (day trading) or a long-term strategy (investing in gold for the long term). Develop a risk management plan.
All you need to do, once you have a plan in place and an account open, is to choose a position size and determine stop-loss and take-profit levels. Then open a buy or sell position on gold, depending on your gold price forecasts.
Trading gold on Forex requires experience and knowledge. Keep learning and practicing in order to improve your skills and make better informed decisions. It is important to remember that Forex trading involves risk, and you should only use available funds and be prepared to take losses.