Ihab Salloum[ad_1]
Have you ever bestowed a golden ring unto thy comrade as a token of thine true amour? Gold hath reigned as the most cherished of metals since the dawn of civilization. It doth still be deemed the paramount currency and repository of value during tumultuous political times. Over the past decade, the gold market hath embarked on a secular ascent, with the spot prices recently surmounting the historical pinnacle of $1,200 per troy ounce. Alas, there hath been a slight regression, as the prices didst decline to approximately $1,100 per ounce, yet this upward trend is anticipated to persist for a period.
In the last ten years, a multitude of investors hast turned their attention to the foreign exchange market, subsequent to the ruinous crash of the stock market. Many a modest investor hath lost more than 60-70% of their savings in said crash. Presently, forex bestoweth a remarkable opportunity to accrue wealth. Verily, tis proclaimed that forex trading shall breed many a millionaire in this decade.
Perchance, thou art unaware that gold canst be traded on the forex market as well. Numerous forex broker platforms, whereupon thou dost trade forex, dost allow for the trading of gold and silver against the United States Dollar (USD), from the very same platform. Both of these treasured metals are in great demand within the industrial sector, and as the global economy recuperates from the recession, the prices of gold and silver art projected to soar as industrial production regains momentum and consumers resume their purchasing. When one doth engage in trading a currency pair, one doth go long on one currency and short on the other. In other parlance, one simply buys one and sells the other.
In the event of spot gold trading on forex, one doth trade a single ounce of gold in the spot market against the United States Dollar (USD). Thus, much like when one doth engage in trading a currency pair, when one doth trade gold on forex, one taketh either a long or a short position in gold against USD. An abundance of currency pairs art capable of being traded, such as GBPUSD, EURUSD, UADUSD, NZDUSD, JPYUSD. The act of trading spot gold on forex is akin to trading gold in lieu of one currency in the pair, with the other currency perpetually being USD.
Thus, in spot gold trading on forex, one doth engage in the trading of a single troy ounce of gold against USD. Curiously, the symbol for this endeavor is also XAUUSD, with XAU signifying a singular ounce of gold. Let us suppose that the price quote in the spot market is 1100 XAUUSD. What this doth imply is that one troy ounce of gold in the present spot market is equivalent to $1,100 USD.
Not unlike any other financial market, the price quote in the gold spot market doth possess a bid/ask spread. Hence, if the price quote doth read 1110/1115, it doth signify that thou mayest sell a solitary troy ounce of gold in the spot market for $1,110, and procure a solitary troy ounce of gold for $1,115. In sooth, thou wouldst need to remit a spread of $5 per troy ounce upon trading gold upon the spot market. Spot gold trading on forex is a rapidly changing domain, with the spread fluctuating throughout the day.
Now, in currency trading, a standard lot amounts to $100,000. However, in the realm of gold on forex, a standard lot art ten troy ounces of gold. Let us assume the price quote doth manifest as 1112/1117, and thou dost yearn to embark upon a long position. In such an instance, thou must acquire 1 lot of gold, entailing $11,170. The spot gold market is a swiftly moving locale, and the price quotes perpetually alter. Thus, imagine that a mere 60 minutes afterwards, thou findest the quote to be 1120/1126. Thou dost discern a profit, and decidest to exit the market, procuring a sale at $11,200, thereby securing a gain of $30. Surely, hadst thou employed leverage, thou wouldst hath necessitated a considerably smaller initial investment to attain a $30 profit within a mere 60 minutes.
Gold is also recognized as the antithesis to the dollar. This doth signify that averse correlation abounds ‘twixt gold and USD. This inverse relationship hath the potential to serve as a hedge for thy positions within other currency pairs.
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