Any gold investor knows the market fluctuates on a seemingly hourly basis. The gold index recently hit nine-month lows, but it’s beginning to bounce back. Prices now are at around $1,190 per ounce, but market experts aren’t sure if the price is there to stay. As an experienced gold investor knows, you have to understand historical trends in order to predict the future more accurately. To determine why the market has bounced back, we need to understand the reasoning behind the recent lows in the first place.
Reasons for the Recent Lows
The United States Dollar Index has been one of the main reasons for the drop in gold prices. When the value of the dollar goes up, gold doesn’t hold as much merit. Also, the slight rise in interest rates has hurt gold prices. Since precious metals don’t earn any interest, people have been investing in other areas that do accumulate interest. However, this doesn’t mean there isn’t any value to people looking to trade gold. There are many variables contributing to the rise of gold prices and the interest in investing.
The Effect of the Stock Market Decline
Any time the stock market declines, the price of gold will generally increase. That is one of the reasons for the recent increase in the price of gold. A slumping stock market won’t attract investors, but gold will since it holds its value, for the most part. Although the stock market hasn’t completely gone up in flames, the movement has been enough to get the attention of gold investors. As a result, we are seeing a slight trend of the gold market rebounding and more people beginning to get into trading gold.
How Long Will it Last?
Expert predictions indicate the recent surge in the gold index won’t last long. There simply hasn’t been much momentum in the gold market recently, so it’s “buyer beware” at this point. The market surge could indicate a buyer’s market, but with the predictions of another decline looming, it actually may be a better decision to sell at this point.
Gold traders are pleased with the recent bounce back after the most recent months-long slump. As an investor, you have to rely on expert predictions and historical trends to determine your strategy, and whether it’s time to buy or sell. Register your free account on our website to receive all latest information about the gold market.
How to Trade Gold?
Take advantage of the daily changes in the price of gold. Start trading gold today by opening a trading account with easyMarkets and get up to $2000 bonus*. As an industry first, they have also launched a unique deal cancellation tool as a way to manage your risk on any bad trades. By selecting dealCancellation on the trading platform whenever you make a trade, you can cancel your losing trade within 60 minutes and get your money back. *Terms and Conditions Apply
Top Broker Bonus Offers