Factors to Watch for Smarter Gold Trading Decisions

One of the most important paradigm shifts created by the global recession a few years back is that no matter how big one’s salary is, it’s not enough. With employment failing to offer any certainty (even if you’ve spent your life servicing the same company), or with business performance easily getting affected by various economic factors, it’s imperative to have other sources of income.

Investing is clearly one great source of income and there are different kinds that you can make. There are investments you can make that will provide you passive or residual income – basically, a salary that keeps on coming even when you’re not really doing anything. The best examples of investments that yield passive income are CDs (certificate of deposits), private equity, P2P (peer-to-peer lending), physical real estate, and bonds. You can experience great success with such investments; however, you will need a considerable amount of money for them.

There also those kinds of investments that are easy to liquidate, and at the same time, have long-term value, such as gold. This precious metal has always been an asset. It can outlast currencies, and changes in the economic and political climate can have you getting solid ROI from them; this is why it’s such a universally desired investment. Plus, it’s so easy to trade gold – way easier than trading foreign currencies, which will require you to monitor a bigger set of influencing factors.

And speaking of trading gold to grow your wealth and establish security fences around your finances, the following are the few factors that you need to keep an eye on in order to ensure you’re making the smart trading call all the time.

· Mining trends

You need to watch the source of gold. See what supply looks like and the current global demand for this commodity. Any development in the gold mining industry will have an impact on gold value. Say, there are major projects and investments for mining companies; you can be certain that gold value will be up for a few years.

· Volatility of the stock market

When currencies and other assets are not performing so well, investors automatically direct their attention toward gold, which they believe is a less risky investment. This will drive gold prices up and if you would choose to sell during this time (to panicking investors), you can expect a really good return on investment (which you can use to finance other solid investments).

· Gold prices

This factor is clearly a must to monitor especially if you’re thinking of selling. What you need to look at are the Spot Rate or current price of actual gold (which changes quite often as gold purchases are made throughout the day), and Futures that fluctuate every day as investors lock in rates to evade risks.

Tracking daily gold prices is actually easy, especially with today’s technology that allows you access to the latest gold trading news and other pertinent information.

· Historical correlations

These need to be considered all the time to anticipate how gold will perform in the market at the occurrence or introduction of certain situations that have already happened often before. The investing scene is always affected by patterns that have been documented in history, so it’s best to include this information in your gold market research and better anticipate potential developments that can impact gold performance, as well as your trading decision.

· Inflation

A lot of economists have pointed out that gold’s value is directly connected to the value of the US dollar. When US currency value is low, gold value increases and the gold trading scene flourishes.

· US politics

Whether the United States of America is still a superpower or not, nobody can dispute that what happens in this country has a great impact everywhere else in the world. Every political issue in the US is the world’s concern and it actually affects gold value. When people lack confidence in US politics, more interest is directed toward gold because it’s what many consider as their “something sure.”

Again, you can earn a huge income from selling during this time as investors turn away from riskier assets and place their money on gold.

Trading gold is definitely less complex, but you need to understand how it performs and the myriad of variables that affect its value in order to be successful with trading.
Fortunately, practically everything you need to learn about trading gold to generate extra income is accessible online. There’s an abundance of effective tactics shared by seasoned traders, and to further make gold trading easier, you can also do it online. There are online gold trading platforms that have established an easy to follow system for trading. They even provide demo accounts so you can get a feel of the process so you can complete your first trade with no trouble.

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