Binary Options Trading Tip for Gold

Gold is a very interesting asset to learn about and trade because of the intricate role that it plays in the world economy. Gold is the thing that people flock to put their money in during periods of economic uncertainty, and during times of economic abundance, their money is more invested in stocks, or currencies; things which offer a greater return on investment.

Why? Gold is one of the only forms of assets available in the world today, which through the test of time, has proven to never be worth ‘zero’.

Think about how strong of a statement that is for an asset to represent.

Paper money, on the other hand, has always been worth as much as the government that backs it. Over time, currencies have failed resulting in the currency dropping to a ‘zero’ net worth, because the governments that issues it failed to manage it correctly, or the government did not meet the currencies’ debt obligations; which lead people holding those currencies to look for other safe havens.

In addition, to gold being an ETF (Electronically Traded Fund), it’s a hard asset, meaning that you can physically hold the metal in your hands. Its value stays with it, where ever it goes. Paper money on the other hand, has a value system that’s dependant on the government’s backing. If the government issuing the currency miraculously disappears tomorrow, the currency’s value does the same. Paper money does have its benefits. Its legal tender, which means, you can actually buy things with it. As oppose to gold which cannot be used for everyday living expenses.

Before getting into trading this asset, it’s important to try to comprehend the meaning of gold for investors, and the role it plays as a safe haven during times of economic uncertainty. This will help you predict if the price of gold is going to go up or down.

Studying current events will help predict where the price of gold will go. Certain events that have a negative effect on the economy will trigger investors to look for safe havens, like gold, and will more than likely cause the price of gold to go up. Events which portray a positive outlook for the economy will have the opposite effect for the price of gold; the price will go down.

Gold is a very long term asset. There are times where an economic event will only affect the price of gold over a long period of time. The reason behind this is that the market has not yet adjusted to the demand for gold. It’s important to have the right investment strategy when trading gold with a constant monitoring of the price after economic events. You should also consider incorporating long term expiry times for your trades. It’s hard to rely on stats and moving averages to predict price direction, with the limited movement of gold. You really have to base your trade on a fundamental supply and demand strategy, and careful timing.

Historic charts show that gold has been rising steadily since 1979, so gold is always going up. If you can time your trades to capitalize on gold’s upward price movements, trading gold options can become very lucrative for you. The key is timing. Start by paying attention to gold prices and commodity news that refer to gold, and successful trades are sure to follow. Stay tuned for more of the latest tips coming your way.