Is Gold An Ideal Investment in Australia today?

Still considered by many Australian investors as a crucial store of wealth, gold and silver are being traded all over the world on a daily basis. There are several reasons why gold is widely considered today, primarily due to the economic uncertainties since the late 2000s. At the moment, the continuous weakening of the dollar and the Euro zone sovereign debt crisis has resulted to gold futures settling high.

While there are several methods for online gold trading in Australia, one that is preferred by a lot of investors because of its convenience is spot gold trading. Spot gold trading in the Forex market is the best way to enter the financial market especially during these rough economic times when the stocks and real estate are no longer as stable as they used to be. Spot gold trading is traded in an over the counter (OTC) market and is based on supply and demand. Just like in currency trading, market players speculate the global prices of gold. “Spot price” is the price quoted for a metal to be paid for two days after the date of the actual transaction or “settlement date”

If you have been trading currencies, then gold trading shouldn’t be an entirely new game for you. Spot gold trades are conducted pretty much the same way as currency pairs are traded. The only difference is that gold is being traded against the US dollar instead of two currencies trading against one another. Additionally, spot gold can be traded both in long and short positions multiple times throughout the day, given that the market moves rapidly.

Spot gold trading is conducted 24 hours a day between Sunday at 6pm ET to Friday at 5pm ET. While the gold trading market is decentralized, there are major centers around the world for these namely Zurich, London and New York. The liquidity of the market is highest when the European market hours overlap with the New York market. Needless to say, this time is the best one for conducting trades.

Just like in any kind of investments, gold trading comes with risks. Take note that it also makes use of leverage which can result to huge losses as much as it can make substantial returns. With this in mind, Australian traders should take the time to learn the ins and outs of the market before risking a large amount of capital.
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