Is Gold Still Worth its Weight?
In the past 2 months, the trend in Gold has been shifting downwards. The Fed’s latest comments caused the precious commodity to deteriorate to a price level of below $1,137, its lowest since the month of June. What does that really mean? Will its price be going up anytime soon? How will the market react to this shift? Does the USD have anything to do about that? To answer these questions, we will first need to understand what caused the price of Gold to reach that low.
Although Gold prices seemed to be going in the opposite direction until around mid-August, the Federal Reserve decided to put an end to it and announced it is planning to raise interest rates until the end of 2016. Will that stop it from moving back up? Not necessarily. For instance, if we take a closer look at the price of the EUR/USD, we can assume that a shift in the currency pair for the favour of the Euro will create a reverse effect, thus kicking the price of Gold back up.
Because changes in price levels happen relatively often, let’s review the cold-hard facts:
- Gold prices climbed 7.4% in the second quarter of 2016 after increasing by 16% during the 1st quarter of the year.
- The price of Gold reached $1,359 per ounce during the month of June-it’s highest price level since March 2014.
- Gold is expected to range between $1,210 and $1,425 during the third quarter.
As one can clearly see, the third point was a guestimate that ended up being not correct. However, about the first and the second, there is no argument.
How will Q3 end up?
While investor and speculative demand for the precious commodity tends to drive the current negative trend on one hand, on the other hand, the metal has become progressively attractive in a negative-interest-rate world. Traders around the globe still believe that the Brexit could actually continue to hurt price risk sentiment, pushing the price further downwards. With Q4 coming in a month’s time, US interest-rate should most probably stay at the same level until the end of the current quarter.
To sum up all of the above-mentioned factors, we can assume that gold prices should be climbing back up until the end of the month or towards mid-November, creating a positive uptrend. What does that mean for gold traders? How and why can they take advantage of dropping or escalating gold prices? Is it possible to benefit from the financial market, without getting in “too deep”? The answer is yes.
Trading gold with an EU regulated broker
In today’s hectic reality and rapid financial market movements, you can actually trade gold within very short time intervals (60 seconds or less), as well as longer ones (up to 1 month). This is made possible thanks to an EU regulated broker, The bottom line is this: regardless of what direction the gold price will be moving, you can benefit from it. The only thing you need to know is how to do it. Thanks to a wide selection of educational tools, you can learn and understand how to take advantage of gold price fluctuations.