For centuries, gold has been one of the most appreciated metals, appreciated for its cultural and financial values, but also magical properties. It is a safe haven asset because it tends to hold its value in times of market turbulence. Trading gold in 2021 is similar to trading other commodities, but it also sets apart in many ways. If we take a look closer, there are more differences than similarities to find.
Gold supply is balanced compared to other commodities and is not consumed like typical essential commodities since its above-ground stocks enable continual usage. It’s an investment and luxury good at the same time.
Gold price fluctuation indicators
The long term trend of gold, according to forecasts, will remain positive as long as the precious metal maintains the level of $ 1800.
Many experts predict that gold will hit a new record in 2021. The Bank of America, for example, has raised its gold price forecast for 2021 to $ 3,000 Oz.
The indicators for price fluctuation of gold are designed to cover many markets, so it’s not unusual for the same indicator to be applied to gold and the stock market. You should pay attention to the indicator’s performance and if it’s present in both bull and bear markets.
Gold price fluctuation is something you can profit from if you know how to read the commodity market charts.
When trading gold in 2021 there are some crucial indicators you should consider. Technical indicators such as moving averages( MACD) and relative strength index RSI can help determine the gold price trends and calculate your profit. Many trading gold experts use the combination of sentiment analysis, technical and fundamental analysis at once. The market sentiment relies on the Commitment of Traders report that is weekly published by the Commodity Futures Trading Commission. Experts in gold trading usually follow USD’s value, which represents a driving force of the gold prices.
How much money can you make by investing in gold?
Let’s see an example, with an investment of 10,000 euros in gold.
Gold started the year 2020 at around $ 1,550 an ounce. In August 2020, it peaked above the $ 2,000 threshold, representing approximately 30%.
The worth of investment of 10,000 euros would be:
10,000 euros x 30% = 13,000 euros, i.e. a gain of 3,000 euros
Online brokers often offer to invest in gold with leverage. With 10,000 euros, and benefiting from the leverage of 5, you can invest 50,000 euros in gold.
In this case, the result will be:
50,000 euros x 30% = 65,000 euros, i.e. a gain of 15,000 euros
Compared to the initial investment (the margin of 10,000 euros), this represents + 150% performance.
Best ways to invest in gold
Faced with the turmoil and economic uncertainty linked to the Covid-19 pandemic trading gold in 2021 gold has many fundamental advantages. It’s suitable for trading in the form of CFDs, gold exchange-traded funds, or long-term investment, for which physical gold is often preferred.
The liquidity of the gold market is impressive. The figures show gold daily trades going between US$50 billion and US$80billions through OTC and spot contracts. Regarding futures contracts, it’s US$35–50bn daily through various global exchanges. ETFs, enable another source of liquidity, with an average of US$1bn daily trading.
If you were wondering where to invest in gold, the simplest, most widespread, and easily accessible method to invest in gold is investing in gold through CFD trading with online brokers, a technique that will suit those who wish to trade gold and those who want to invest for the long term in precious metals.
Before you can invest in gold, your first task will be to find a reliable online broker suitable for your needs, allowing you to invest in gold smoothly and highly profitably.
