Making money trading in gold and silver

Trading in gold and silver is easy to begin with, and very exciting for any trader. Those who are familiar with the currency market knows that gold and silver are considered as a form of currency.

Trading gold & silver

Gold and Silver offers many attractive opportunities for daytradere and speculators.

22. April 2024 by Click insider / Commodities Trading

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Trading of gold and silver is conducted electronically in the same way as trading stocks, currencies or futures contracts.

Gold and silver trades through a commodity broker (On the welcome page, you find a list of recommended commodity brokers).

For those familiar with currency trading is the learning curve in the trading of gold and silver no challenge. The difference from common currency is that gold, silver and other commodities can only trades against the U.S. dollar (USD). Gold prices are always expressed in U.S. dollars.

There is another similarity between currency and commodity trading as well. It requires no purchase of a physical unit of real matter. You do not buy gold or oil to speculate in gold prices and oil prices. Just as you do not need to buy euro-currency to speculate on the exchange rate on the euro.

When you buy gold using a trading method called "over the counter" and often abbreviated OTC.

OTC trading is not part of the stock exchanges around the world, and therefore not controlled by the same bodies. OTC trading takes place directly between the seller and buyer and no outside organization is involved.

OTC trading is the most common way to perform both commodity trading and currency trading at.

Daytrading in gold prices

Daytrading is a trading method which has received much attention in recent years. Many have already closed their jobs to concentrate fully on the trading, others trader outside working (convenient opening hours in these markets allow trading in the morning as well as evening).

Daytradere hold their position for only a short period of time, and usually closed position before the market close that day. A trade may have a duration of several days, depending on how the trader wishes to position itself.

For a daytrader is buying and selling snowballed. After purchasing gold, the next task is to assess when to sell (ie: quit your position). To end position can be done in three ways:

  1. trade shutdown trader
  2. trade closes automatically if the stop-loss limit is reached (stop loss can be set automatically by the trader himself, or by broker / trading system).
  3. date when the position will be closed come.

Until one of these three points interruption occurs, the position will be open. The trade is active. When a trade is open will be renewed every day at 23:00, and every day it will cost you a (small) fee. It is because of this profitable to terminate their positions until the next day.

Why trade in gold and silver?

Commodity trading has become a much interesting in recent years as it is now accessible to virtually anyone, and services on the market has improved. Real-Time Quotes and graphs (charts) that are updated live are available for all these days and is no longer something that only professionals can afford to spend.

Trading of gold is attractive to many different types of investors and business people. Whether you are a daytrader, investor or businessman. As gold prices often move opposite to the U.S. dollar, it is possible to hedge against financial losses by positioning themselves in gold. Buying gold can also be justified as a balance against the effects of inflation and deevaluering of currencies.

Gold prices are measured relative to the weight of gold. The price shows how much an ounce of gold costs in relation to the U.S. dollar.

A shortcut to make money by buying and selling gold?

There is probably no shortcuts to quick money. It does admittedly not that one should take the heaviest and most difficult way.

Although trading in gold may seem relatively simple, it is necessary to have basic knowledge of how one trader in gold. Fortunately for novice traders, there are more than enough resources on how to start trading in gold.

An opportunity you should take advantage of is to open a trading account with a commodity broker, where you often get the opportunity to try risk commodity trading (including trading in gold). The risk we mean completely without risk, in cases where you have the opportunity to try a free, no-obligation demonstration of their trading system.

All about investing in gold and gold prices

gold is not connected to corporations, governments or countries, and therefore, investment in gold help to prevent financial problems. It is not without reason that most countries are sitting on large gold reserves. To only own currency and companies are too risky, why is gold valuable investment for both countries and larger companies.

a trader gold is first and foremost an opportunity to make money. A gold investment may be investing in gold bars, gold coins, and even gold jewelry. Many different types of gold investment is possible in the financial world.

Gold market is a worldwide market. London and New York are the two largest marketplaces for gold in the world. Gold market works like other investments and memories to some extent on a stock exchange, for those who are familiar with stock trading. Gold prices also affected by economic conditions in markets such as is the case with stocks.

Like all other commodities, the price of gold determined by supply and demand. Gold has always been a valuable resource. The strong inflation, many people are considering buying gold. If gold "hams tres", the availability in the market is reduced, thus goes the gold price up.

How to make money on gold?

Some investors see opportunities when the gold price rises. They buy and hope that the price will go even higher up so that they can sell for a profit.

Another way one can make money on gold is to speculate when the gold price is falling (on the way down). They can then sell the gold in some markets (as in the forex market), even if they do not own the gold (ie you sell something you do not own) and buy it back later. This is possible because of the financial instruments in the commodity market. If they speculate correctly, they would achieve a profit on selling gold that they do not own. This is completely legal and is something anyone can do if you understand how it works.

Other investors believe that it is better to buy gold, even when the price of gold goes down. They believe that the price will rise again later, and then they will make money again when it rises.

How to earn money trading silver

price of silver fluctuates so even with the small supply of capital. Speculators are attracted to the volatility of silver.

Trading in precious metals like silver is performed by two popular silver exchanges: eCBOT (Chicago Board of Trade) and COMEX (part of the New York Mercantile Exchange - NYMEX).

Silver price rises in line with market demand. But what factors are affecting the demand?

Silver Rates are subject to demand national authorities. The U.S. government, for example, they hold the silver in reserves. The government resorted to buying the metal in large quantities from the market when the reserves plummet, thus pushing up the demand.

industrial demand is also a significant factor. Manufacturing accounts for about 40% of the demand for silver. The metal used not only in jewelry and trinkets, but in the mirror, electronics, batteries and photographic equipment and more.

Last but not least, the silver price depending on demand from investors and speculators. This group, however, in the minority, accounting for only 5% of the demand for silver. Thus we see that these are not the group that affect silver prices the most. However, the purchase of large investors have an immediate impact on the demand and price of silver.

Shop silver via futures contracts

A futures contract is a legal agreement that specifies a standardized exchange of silver. In a futures contract for silver buyer agrees to take delivery of the metal at a future date at a predetermined price.

Silver traded in mini contracts and standard contracts. A short contract consists of 1,000 grams, normal contract 5,000 ounces of silver. Worth noting is that a mini contract may only be traded in eCBOT, while a standard contract are available in all silver exchanges.

right to know the speculation in silver:

The most active months for delivery (by volume) in March, May, July, September and December. As a speculator in gold prices should keep this in mind at all times.

Last Trading Day for futures expires at the end of the third last business day of the month. Trading ceases on the second Friday of the month before the delivery month of the underlying futures contract.

There are many sources of good and useful information for those wanting to learn more.

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