Reasons Why Gold is Traded

Gold (XAU/USD)

As an investment, gold is the most popular of the precious metals. Investors generally buy gold as a hedge or safe haven harbor during economic, political, or social uncertainty (including investment market declines, burgeoning national debt, currency failure, inflation, war and social unrest). The gold market is subject to speculation as are other markets.

The history of the gold standard, the role of gold reserves in central banking, gold's low correlation with other commodity prices, and its pricing in relation to flat currencies during the financial crisis of 2007–2010, suggest that gold behaves more like a currency than a commodity.

There are several factors which drive gold up/down:
-Global inflation
-War in the Middle East and North Africa
-Threats to oil supplies
-Volatility in the forex markets

To ensure permanent success for gold trading, choose the most correct and suitable strategy. The beginners who just entered the business, can use a so-called "game on news". In a more comprehendible language - contracts for gold. Experts recommend buying during long recession and do not take into account a continued decline.Gold volatility is very high, so it requires a calm attitude and thoughtful approach. After a relatively long price decline, the likelihood that gold will return to its former high position, and even exceed them, is great.