Gold Trading using TradeThink.com

 

 

Gold Trading is accomplished in many ways. Lots of individuals and investors will buy gold coins and gold bullion. This is good for a longer term strategy if you expect the price of gold to only go higher. What if you would like to bet on the price of gold going lower? Would you like to leveredge your returns?

Professional traders and individual investors will trade gold with gold futures which allow you to speculate and hedge on the price of gold going up or down.
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Gold is classified as a precious metal and gold futures are primarily traded in the United States on the CME Group exchange. Gold futures were previously traded on the COMEX division of the NYMEX in New York City. Gold bullion is traded on the London Bullion Market "LBMA".

Gold Trading Prices

Gold trading is very attractive because of the big price moves gold can make. The bigger the price move the more money that can be made. Gold "symbol GC" trades in a futures contract of 100 ounces. Gold has been trading in a range of $1319 - $1892 a ounce over the past year 2011. Going back four years to 2008 the range is from $738 - $1892 per ounce. In the last ten years gold has been as low as nearly $400 an ounce.

Every .01 the price of gold moves is a $1 move in value of a futures contract. A full $1.00 move in the gold market would equate to a $100 move in the futures contract (100 ounces X $1.00 = $100). A $100 move in the gold market has a value of $10,000 and would be considered a sizable move.

Gold is traded with a futures contract to speculate on whether the price is to go up higher or down lower. If you think gold will increase in value you would want to go long a futures contract. This would be the case if you predicted that the amount of gold production was going to be lower or if demand for the gold is high, then the price of gold should go higher. Golds main use has been for historically for jewelry and investing.

 

Gold Trading Basics

Gold is by all means an international precious metal. Gold trades daily all over the world with two of the largest exchanges being the London Bullion Market and the Comex Exchange in New York (Now CME Group). On the CME Group gold futures trade daily on Globex nearly nonstop Sunday - Friday from 5:00pm to 4:15pm Chicago time. Gold still has an open outcry session Monday - Friday from 8:20 am - 1:30 pm EST in New York known as RTH or Regular trading hours.

 

Gold is produced in over 80 countries worldwide. The majority of gold is produced by a handful of countries with South Africa being the dominating gold producer for the majority of the 20th century up until the 1970's when turmoil, civil unrest and diminishing reserves. Now China is the larges gold producer along with Russia, Indonisia and Peru. The United States, Canada and Austrailia being major producers are still major players but are losing ground.

 

To speculate or bet on the direction of the gold market (this can also be used as protection for producers and comercial consumers). You would trade gold using a futures contract on the CME Group (formerly the COMEX division of the NYMEX).

One of the best ways to judge gold price direction is to use a trading algorithm to tell you the best time for you to buy and sell gold.

 

One of the ways professional traders will use to determine whether to go long or short the gold futures is to use a trend trading system. Many traders use TradeThink our proprietary trading algorithm to help show the trend direction of the copper market.

 

 

Gold Trading Systems

Because the value of a gold futures contract can be quite high (100 ounces) per contract. The total value of a single copper contract valued at today's price of $1745 per ounce has a total value of $174,500. The current margin is $11,475 to control each contract. Most traders using a trading system to select potential gold trades will trade but a single contract. Larger traders can use TradeThink Legacy X Pro system to follow up to six gold contracts at one time.

 

Gold Grades

The CME Group requires that gold delivered be a minimum of .995 fineness. Gold for jewelry will be broken down in to several carat grades from 10 carat to 14 carat, then 18 carat and 24 carat. Most gold jewelry is 14K and 18K.

 

 

Gold Properties

Gold AU is unique in it's properties as being soft, unaffected by nearly all reagents and completely unaffected by air. Gold is malleable and bright yellow.

 

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To find the best way to trade the gold market click Free Trial for Trade Think . You can also sign up on the right side of this page.

If you would like to learn more about gold trading you can sign up for a trial and you will be able to see gold charts and price quotes. For information on gold margins please view our margin section.