Gold trading requires a good head for economics but the rewards are great. Every year thousands of professionals realize the potential of trading precious metals like gold and silver. In fact their numbers have more or less doubled in the last ten years and growth in the sector shows no sign of slowing. Much of this growth can be attributed to the increased accessibility of modern online gold trading; thanks to handy trading platforms like Metatrader 4 people can get involved without having to dedicate themselves full time.
Gold trading is also enjoying record demand these days as a result of the recent global recession and uncertainty surrounding currencies that were once considered invulnerable. This kind of market behavior has been around a while and is quite consistent and predictable.
The price of gold fluctuates only slightly because national problems such as recession, unemployment, etc. don’t affect its value. For this reason when usually strong currencies are floundering, for example the US dollar or Euro, many traders will buy large volumes of gold to avoid the loss associated with holding onto these failing currencies.
The key to gold trading then is to know when a strong currency is about to take a turn for the worse. The clearest indicators that a currency is going to suffer are high unemployment and other signs of economic recession, political instability such as internal conflicts or conflict with neighbors, and environmental challenges such as natural disasters or shortages of important resources.
When such occurrences hint at economic decline there is often a gold rush in response as investors and currency traders alike scurry to escape the sinking ship. Another reason that investors buy gold is to ‘retire’ as it were, from the world of trading currencies. Investors who are no longer interested in dealing with currency fluctuations can bypass them altogether by keeping their savings in the form of gold.