Gold at Forex market

Gold is the oldest and the most efficient measure of capital and wealth. Today, traders and brokers all over the world can exchange currencies in the market. Gold is now considered as a currency like any other currency and can be traded as such. Its value or gold trading price is expressed in terms of the US dollar – that is how much gold you can buy or sell for one US dollar. The history of gold trading tells the story of attempts to make international trade – especially in the Forex market – easy and balanced.

Gold has been used for investments for a very long time. It has a high value and is an independent resource. It is not subject to individual countries or trading markets. It is not connected to companies or governments. For these reasons, gold investment in gold can usually help an investor to avoid some problems that can happen in the economic environment.

Gold investment can mean investing in gold bars, gold coins, and even gold jewelry. Many different sorts of gold accounts are available in the investment world. The investors looking to invest in gold directly have three choices: they can purchase the physical asset, they can purchase an ETF that replicates the price of gold, or they can trade futures and options in the commodities market.

In Forex trading, the main thing is that gold can be a protection against the US dollar. If the US dollar increases in value, the gold trading price decreases; if the US dollar decreases, in tthis case gold prices increases . With this knowledge, investors can use gold trading as a way of balancing their profit and loss against the US dollar.

Market conditions change but, in the long term, gold keeps its purchasing power. Its value, in terms of the real goods and services that it can buy, has remained firm. The purchasing power of many currencies has generally decreased because of the impact of rising prices for commodities and services.

As a result, some investors buy gold to balance the effects of inflation and currency value changes. In Forex trading, buying and selling gold is usually done by investors not for the long run, but rather for speculation reasons. In the Forex market one can buy gold (XAU) and sell it after a few hours, trying to profit from the small fluctuations (moves) in the gold price.

There are several factors which drive gold up/down:

Gold is traded against both the US dollar and Euro, and traded in a similar way to any other currency pairs on the platform. Traders are able to use both market execution and pending orders on these pairs but there are a couple of key differences to trading currencies:

  1. Contract size. One gold contract equals 100 ounces, so smallest trade size is 0.01 being 1 ounce of gold. The quote price is per 1 troy ounce, so you will need to multiply the trade size in ounces by the entry price to calculate your exposure.
  2. Trading hours. Gold open one hour later at the start of the trading week at platform time 01:00 and has a forty-five minute break each day following from 00:15 to 1:00 when underlying physical gold market is closed.

XAU/USD and XAU/EUR for gold versus the US dollar and the Euro.

To get involved in trading gold, start by opening an account for free.

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