In a recessionary economy, gold is still a safe asset for investors. Recently, gold has had strong price increases, bringing great profit opportunities for traders. One of the most popular forms of investment is forex gold trading. So what is forex gold trading? Why is this form of investment popular? Join Learn Forex Trading to learn about world gold price and the impact of gold prices on forex trading through the article!
What is gold trading? Why should you care about trading gold?
Forex trading is the most popular form of online investment today. The forex market with hundreds of types of financial instruments such as stocks, commodities, and currency pairs,… offers many trading opportunities with huge profits. Anyone can participate, anywhere.
Among commodities, forex gold is chosen by many traders because of its great benefits. Let’s learn about the concept of forex gold trading and its advantages.
Concept of gold trading in Forex
Forex Gold or Forex Gold is the name of the precious metal Gold in the forex market. Compared to other types of assets, forex gold is considered a safe and highly liquid product. Forex gold trade is a form of exchange for buying and selling the XAUUSD gold index on the forex market.
Why should you care about trading gold?
Forex gold trading is a fairly new form but is chosen by many people because of its many advantages:
- Convenient and flexible: Forex gold is different from physical gold, traders do not own real gold. Forex gold trading is carried out entirely on the broker’s online platforms.
- Reasonable, fast, and convenient leverage: With physical gold, investors must have a large capital. But with forex gold, you only need to deposit a small amount of capital, combined with leverage to get good profits.
- Accurate, timely analysis tools: Trading platforms provide traders with a full system of tools, serving technical and fundamental analysis. Analyze price charts in the appropriate time frame, helping to access the market quickly. From there, evaluate the market accurately and comprehensively. From there, make reasonable and timely decisions.
- High liquidity, speed trading: With 24/5 trading time, you can flexibly trade forex gold. With physical gold, you may have to depend on the gold shop’s hours. Besides, high liquidity is reflected in the fact that you can withdraw capital and profits at any time and as much as you like.
- Make money whether the market goes up or down: With short selling orders, traders can profit even when the price of gold falls. As for physical gold, only when the price of gold increases will you have money.
How does the world gold price impact trading?
world gold price is the most important factor affecting forex gold trading. Below are the most obvious effects that traders need to master.
Adjust your gold trading strategy
When gold prices fluctuate, investors often have to adjust their trading strategies to take advantage of opportunities or reduce risks.
We will look at specific factors that world gold price can influence an investor’s trading strategy. Covers technical, fundamental, and trend-forming factors in the gold market. From there, adjust how to play Forex to suit each period of gold price fluctuations.
world gold price affects market liquidity
The gold price is not just an indicator of the health of the gold market. It also significantly affects the liquidity of global financial markets.
Gold is an asset with a stable price and is safe even in chaotICMarkets. When gold prices increase, investors may shift from high-risk assets to gold. This affects the liquidity of other assets.
world gold price affects the domestic gold price
world gold price often has a major impact on a country’s domestic gold price. Here are some ways the world gold price can affect local gold prices:
- Global economic situation: The world gold price often reflects the global economic and political situation. When there are major fluctuations in the world market due to factors such as the rise and fall of the global economy, war, or uncertainty in the financial market, the domestic gold price will also be affected.
- Exchange rate: Gold prices in the world are usually priced in USD. Therefore, fluctuations in exchange rates can impact local gold prices. If the USD price increases, the domestic gold price may increase, and vice versa.
- Market psychology: world gold price often creates psychology in the domestic gold market. If gold prices increase, investors and consumers may tend to buy domestic gold to protect the value of their assets, increasing domestic gold prices.
- Import and export costs: Many countries have to import gold to meet domestic demand. If world gold price increase, import costs also increase, which can increase domestic gold prices.
Where to track world gold price?
One of the most accurate ways to view forex gold price charts is through online websites. So specifically, what is the reputable source of gold price charts and what is the standard way to view the charts?
Sources for Gold Price charts for Forex trading
- Goldprice.org: Right on the homepage, the price of gold is displayed. Here, traders will see fluctuations in gold prices compared to the previous day, and recent gold price developments.
- Kitco.com: Similar to Gold price. ord, Kitco is also an online website that immediately displays gold prices corresponding to 14 different currencies, in units from gram, kg to tael, tola, and pennyweight.
- Tradingview.com: Traders can both view gold prices and combine chart analysis. Just click on the code XAUUSD in the Watchlist section in the upper right corner of the home page interface, and the Forex gold price chart will appear very clearly and intuitively.
- Investing.com: Provides extremely detailed and diverse gold price charts. Traders can view charts in multiple time frames, using technical analysis tools to make decisions.
What information does the world gold price chart include?
The gold price chart records all gold prices from the past to the present. From there, traders can compare and evaluate to decide on effective transactions. Gold price includes current market price, opening/closing price, and lowest/highest price.
For scalpers, they are often interested in intraday gold price fluctuations and the difference between the current price and the opening price. As for long-term traders, they care about the closing price compared to the opening price.
Instructions on how to view world gold price via chat
Traders can view gold prices by chart type and time frame. Or combine chart types and time frames to observe gold price fluctuations most completely.
- Time frame: from short to long such as minutes, hours, days, weeks, months, quarters,… giving traders the option to observe gold price fluctuations depending on their short or long-term trading strategy.
- Type of chart: Traders can observe gold price fluctuations through many types of charts such as line charts, Japanese candlestick charts, bar charts, etc. Among them, bar charts and Japanese candlestick charts are common and detailed. best. Traders can track all gold price information while combining it with technical tools in chart analysis.
Formula and how to convert world gold price to UK gold price
Before you want to convert the world gold price to the UK gold price, you need to determine the unit of measurement and age of gold. Then, calculate the domestic gold price based on the conversion formula.
Unit of measurement of gold value in the UK
About units of measurement
In the field of UK jewelry, people measure/calculate the volume of gold with the units of gold cup, gold stool, gold thread, and gold amount (gold tree). In there:
- 1 tael = 1 tree = 10 taels.
- 1 thread = 10 centimeters.
- 1 centimeter = 10 cups.
In the world, the amount of gold is measured in ounces (Oz). 1 ounce = 31.1034768 grams.
About the golden age
According to UK people, the golden age is determined by the pure gold content of over 10 gold units. For example: 1 tael of gold has a golden age of 7.5, meaning that 1 tael of gold contains 75% pure gold.
In the world, the golden age is named karat (symbol Kt). Specifically, 1 Kt = 1/24 x 100 = 0.04166666 x 100 = 4.166666. For example, 24Kt gold will have 24 x 4.166666 = 99.99. In UK, people will call 24Kt gold 4 number 9 gold.
Formula to convert world gold price to domestic gold price
Once we determine the unit of measurement for gold and the age of gold, we convert the gold price according to the following formula:
Step 1: Convert unit oz – grams: 1 oz is equivalent to 31.1034768 grams. That is, 1 tael (37.5g) will be equivalent to 37.5/31.103478 oz = 1.20565 oz or 1 oz = 1/1.20565 = 0.82945 tael.
Step 2: Apply the formula Domestic gold price = ( world gold price + insurance fee + shipping fee) x (1 + import tax): 0.82945 x USD exchange rate.
For example:
- Insurance fee: 0.25 USD/ounce;
- Shipping fee: 0.75 USD/ounce;
- Import tax: 1%.
We have: 1 tael of SJC gold = ( world gold price + 0.75 + 0.25) x (1+0.01): 0.82945 x USD exchange rate + dollar price].
Basic factors affecting world gold price
Gold is the favorite investment asset of many traders because of its safety and great profits. However, to invest in gold effectively, traders need to regularly update information about gold prices and factors that affect gold prices. Combined with events and analytical methods to build a smart investment strategy.
Economic fluctuations affect the gold price chart
Fluctuations, especially economic crises, are the first factors affecting gold prices. When the economy is unstable, the value of the domestic currency changes. Other forms of investment such as stocks, real estate, and savings,… are not profitable. This makes gold beneficial, becoming a safe channel for investors. Gold prices tend to increase rapidly, gradually stabilizing when the economy recovers.
Changes in ETFs impact the gold price chart
ETF funds such as IAU or GLD are considered factors that directly impact gold prices. This fund allows traders to use certificates provided by the fund to buy gold. Currently, both IAU and GLD fund organizations hold extremely large amounts of gold. When investors massively buy or sell certificates, the price of gold will be seriously affected.
The impact of the USD on gold price chart fluctuations
The US dollar is also considered a factor that has a major influence on gold prices. Experts say that currency and gold prices have an inverse correlation. That is, when the US dollar (USD) increases, the value of gold will decrease and vice versa.
Currency decline will affect the economy. As a result, investor confidence also decreased. This makes them switch to investing, using gold as the main tool of exchange.
In addition, several factors affect the gold price chart such as:
- The correlation between gold supply and demand causes fluctuations in gold prices
- Correlation between oil and gold prices
- Inflation/interest rates affect gold prices
See more: Instructions for registering an Exness account
Are there any disadvantages to trading forex through gold?
Similar to trading other assets, forex gold also has some risks. Here are the main disadvantages when trading forex through gold:
- Market risk: The gold market can be affected by many factors such as the global economic situation, energy price fluctuations, and even political situations. This makes investors uncertain about trading orders.
- Price volatility: Gold prices can be highly volatile, especially during periods of uncertainty. This can pose challenges for those looking to maintain long-term investment positions.
- Large Margin: To trade 1 lot of forex gold, with 1:500 leverage, you need up to 900 USD.
- High volatility/day: While the main currency pair in forex fluctuates around 80-100 pips per day without major fluctuations, forex gold can fluctuate up to 200 pips per day. The larger the fluctuation amplitude, the greater the risk. Faster profit/loss speed. You can use a sell stop order to protect profits when the price falls below a certain key level.
- Rapid profit/loss leads to excessive emotions. Can be negative or aggressive, causing faster losses.
Disadvantages of trading gold in the UK market
- The law does not specifically stipulate that gold trade in the UK is not protected by laws. Many forex brokers are scammers with seductive tricks, causing many traders to fall into the trap.
- Decentralized market: The gold market in the UK is not fully diversified. This could affect liquidity and gold prices.
- Legal/Tax Risk: Legal and tax measures are subject to change. This increases the risk for those participating in gold trading in the UK market.
- Accessibility: Limitations in infrastructure and trading terms can be a challenge for traders wanting to trade gold in the UK.
Trading gold requires a relatively large amount of assets
- Margin Requirements: Gold trading often requires a relatively large amount of assets to open and maintain a position. The reason is that the leverage ratio in gold trading is relatively low. This can create financial pressure for those who want to participate in gold trading.
- Financial management risk: Because of the large amount of investment assets, financial risk management becomes important. Losses can affect investment accounts quickly if not managed properly.
- Market possibilities: Large fluctuations in gold prices can create challenges. Especially for those with only a small amount of assets who want to ensure the sustainability of their trading positions.
Epilogue
Above, Learn Forex Trading has provided readers with all the information they need to know about world gold price. In particular, know the impact of gold prices on popular forms of forex gold trading. Hopefully, the knowledge in the article will help you know the source to view the standard gold price, thereby combining it with analytical methods to succeed with forex gold trading.
FAQ
How to see the world gold price?
The simplest and most standard way is to visit official websites providing world gold price information. Typically: Goldprice.org, Investing.com, Kitco.com, Tradingview.com, and many other websites.
Why is gold price important for forex gold trading?
Gold ranks at the top of the list of safe assets in the financial market. Forex gold trading is popular with many people. Gold trading is essentially buying and selling forex gold. Therefore, the price of gold is closely related to trader behavior. Monitoring gold prices helps investors make accurate forex gold trading decisions and minimize investment risks.
How to make accurate trading decisions based on world gold price?
You need to monitor and update economic, and political factors and market events regularly. From there, evaluate their impact on the gold price trend, and then decide on appropriate transactions. At the same time, evaluate the risks of that trading decision.