Technical Analysis Gold Futures
GOLD for InvestorOn the COMEX New York Mercantile Exchange, gold futures trade under the ticker symbol GC.
The Chicago Mercantile Exchange (CME) provides a futures contract with the similar ticker GC.
On the London Metal Exchange (LME) - LME Gold.
The Intercontinental Exchange (ICE) has the gold futures ticker ZG.
The gold quote is displayed in US dollars. The volume of the contract may vary, but on most key exchanges it is 100 troy ounces.
The types of futures also differ on different exchanges. For example, delivery contracts are traded on the Chicago Stock Exchange and ICE, implying the physical purchase or sale of gold.
There is also a spot market for gold. Its basis is the LBMA Gold Price electronic auctions, which in 2015 replaced the usual gold fixings. Twice-daily auctions determine the price of gold, which is the global benchmark for physical gold trading.
Moreover, you can invest in gold in many banks, not only by purchasing bullion, but also by opening an OMC - an impersonal metal account.
So you can invest in gold the amount equivalent to one gram of it (and sometimes less), without having to spend money on storing it and overpay for the physical form.
At the same time, the cost of gold at the OMC is close to its stock quotes. This type of investment is well suited for long-term investments.
Gold replaced money for a long time, after which it served as collateral for many currencies. However, even after the abandonment of the gold standard, some currencies have not lost touch with the yellow metal and show correlations with its price.
The largest gold producing states include China, which accounts for more than 10% of global production, Australia, the USA, Canada, Peru, Indonesia and South Africa.
In total, these countries produce more than half of all gold per year.
The largest gold mining and processing companies in the world:
- Newmont Goldcorp (TSX:NGT, NYSE:NEM)
- Barrick Gold (TSX:ABX, NYSE:GOLD)
- AngloGold Ashanti (ASX:AGG, NYSE:AU, OTC:AULGF)
- Kinross Gold (TSX:K, NYSE:KGC)
- Newcrest Mining (ASX:NCM, OTC:NCMGF)
- Goldcorp (TSX: G)
- Freeport-McMoRan (NYSE:FCX)
- Polyus Gold International (LSE:PGIL)
- Gold Fields (NYSE:GFI, JSE:GFI)
- Randgold Resources (OTC:RNDXF)
- Yamana Gold (TSX: YRI)
- Eldorado Gold (TSX: ELD, NYSE: EGO)
The high value for the industry of gold betrays the fact that it is not subject to oxidation. In addition, it has a low melting point of 1064 degrees, and is easily amenable to physical impact.
There are two main types of gold: bank gold, which is available in 999 fineness and traded on financial markets, and jewelry with fineness below 750, which contains impurities to give it strength and durability.
Over 50% of the world's gold is used for jewelry. About 10% of the total volume of gold is industrial products: it is used in the creation of electronics, weapons, in the medical field, as well as in nuclear fusion and the space industry. 40% of the mined gold is used for investment purposes and 10% remains in the foreign exchange reserves of states.
How to Invest in Gold?he easiest and most profitable way to invest in gold, of course, is to buy gold assets on commodity exchanges. To invest in gold, it is not even necessary to leave your home, as the exchanges work only online and all transactions are made through a computer and the Internet.
Since the exchange does not work directly with clients, there are special intermediaries - brokers. You only need to register with a broker, replenish your personal account and open a deal to buy gold.
To open a deal, it is enough to register, replenish an account, open a trading terminal, where you can select the desired asset and indicate the volume of the transaction (lot), and then indicate the direction of the transaction - Buy (Purchase) or Sell (Sale).
How much can you earn trading gold?
There is no clear answer to this question, since everything is individual and depends on the way you invest in precious metals. One thing is for sure - gold has been steadily holding an uptrend for several decades. And this trend will continue further, as every year the amount of metal dries up on the ground, making it limited and more expensive. Here the law of supply and demand works 100%. Even if demand remains at the same level, the supply on the market is declining every year. Which leads to an increase in the price of 1 unit of gold.
Need to invest in gold?
According to the forecasts of analysts and experts, sharp jumps in gold prices are not expected in the near future. Unless a global catastrophe occurs.
But given the peculiarities of the gold market, quotes for its assets will grow at a moderate pace over time. This means that investing in gold is a kind of win-win profitable option. But only in the very long term. Therefore, the investor needs to be patient.
Buy gold should be during economic crises. It is during this period that up to 50% of all purchases occur.
Advantages and disadvantages of investing in gold
Gold almost does not depreciate. But despite this, its price range can reach large sizes. For this reason, in the short term, investing in gold can lead to large losses due to price spikes. But in the long term, they smooth out and are the usual market noise in the main uptrend.
Another significant drawback is the large spread. When buying gold coins, there is a significant plus - the absence of commissions for the purchase. Investing in gold bars and jewelry carries the risk of theft. But in OMC, you do not need to pay taxes for the purchase of physical ingots, while there is no risk of theft.
But it is not in vain that investors do not seek to invest all their capital in gold, although this is a win-win investment. For them, gold is a kind of dead asset. And after the same 10 years, the profit from it can be “eaten up” by inflation. And you will not receive any dividends for owning gold bars.