Know the Gold Rate Trends
Gold is one of those precious commodities that can be used in a number of ways. For instance, it can be used as a currency or to back certain currencies like the USD. Banks, all around the world, hold a certain amount of it, at all times, for use in emergency situations. It ceases to lose value and hence finds itself right on top in the list of commodities most likely to be traded in. As a trader, it becomes essential for you to know the gold rate trends to be able to make profits. For this, you would do wise to get an insight to the intra-day, weekly, and monthly futures charts that are graphs depicting price variation of commodities like gold.
As a gold forex trader, your challenge lies in finding tools that help analyze the market to precisely define the market entry and exit points, or the buying and selling times. A knowledge of the inter-market relationships can be of great help in predicting the gold rate movements effectively. This inter-market analysis essentially pertains to gaining an insight to the correlated entities of stocks, commodities, and foreign currencies. For instance, you may like to keep a consistent watch on the currencies backed by gold like the US dollar, as well as the prices of other commodities like crude oil.
Other such inter-market considerations can be the global economic state and current rates of interest. A healthy state of economy imparts confidence and stability to this market of speculations. It further imparts strength to the currencies most traded in such as the US dollar. Rates of interest have a big role to play as well in the final settlement of trades pertaining to stocks and forex.
To know about the gold fundamentals and inter-market relations is a prerequisite for gold forex traders. This market can be volatile and you must study the extent of volatility by having a look at the gold rate fluctuations in the gold charts of short-term and long-term nature. Other important tools for effective analysis of price trends can be the relative strength index, divergence, and trend-lines.