Trading Gold, the New Way to Combat the Economic Crisis

Trading Gold, the New Way to Combat the Economic Crisis 1As we explained in “Why Invest in Gold,” gold has long been considered a safe haven in times of economic, geopolitical and financial instability—and all of today’s bad economic news has made gold a hot commodity, in many ways.


As consumers feel the economic pinch of unemployment and declining housing and equity prices, they are turning to pawnshops. Recent reports say businesses buying gold have seen a 50 percent increase in activity in recent months.


Individuals selling their gold maybe better off looking into trading gold online. As we mentioned above, gold has long been considered a safe haven in times of economic instability. Inflation and currency devaluation (which we are experiencing today, as the U.S. Federal Reserve Board, concerned about the economy, inflates the U.S. money supply by lowering interest rates and selling U.S. government securities) are also good for gold.


In today’s economic and financial environment, many investors have taken flight from riskier assets such as stocks and derivatives, into gold, creating significant opportunities in gold trading. Gold recently hit a 25-year high, and there appears to be room for improvement: The Dow/Gold Ratio, which is calculated by dividing the Dow Jones Industrial Average by the price of an ounce of gold, was below 8, which is historically very low, as of February 2009—and if history is any indication, individuals will do as they have done in the past to preserve their assets by investing in gold, thereby driving up its price.


How can you take advantage of these conditions? By trading gold. Many gold-trading platforms exist, making it easy to trade gold online. How? Trading gold futures and gold options are appealing ways to speculate on the price of gold or to hedge risk. But trading spot gold is also a great option, as spot gold trades globally in an over-the-counter (OTC) market available 24 hours a day. You can trade spot gold online via a number of forex trading sites, and since you can use leverage, it is easy to get started trading gold with a very small cash outlay.

About The Author

Scroll to Top