Spot Gold and the U.S. Dollar
It is an exhilarating experience to be involved in gold futures trading and gold options and speculate on the gold price, while hedging risk. However, trading spot gold can be even more exciting because the U. S. dollar makes an entry in the picture here.
While trading spot gold, the procedure is quite similar to what you would do when you trade forex currency pairs. For gold you take a long or short position while for the US dollar, it is the opposite position. In the world market that is open twenty four hours a day from Sunday at 6 pm till Friday at 5 pm Eastern Time, spot gold is traded over the counter. If you ware wondering why Eastern Time, this is because it is convenient for gold forex traders all over the world.
Many forex trading sites allow you to trade gold online. Depending on the supply and demand, the gold prices can vary, even though there is a reference point for the prices set by the twice daily gold fix in London. In the spot market, gold prices are called spot prices. This is the price that is quoted for spot gold and it includes the logistics of delivery. This is payable within a couple of days after the day of the transaction. The day on which the money is paid is called settlement date and is quite similar to the forex settlement procedure.
You can enjoy four hours of trading in the morning if you live in the US as the best trading time is when the European market hours and New York market hours overlap. On an online forex trading platform, you can trade silver, oil and currencies in addition to spot gold and it more or less works similarly. Just like you would with spot gold, you take the long or short position with silver or oil while taking the opposite position with the currency pair.
