Trading Gold Futures Contracts

Gold trade has the ability to provide investors in the market less volatile. Most traders find that the gold market allows them to diversify their portfolios and add to these goals long-or short-term investment. It also provides the ability to trade with different qualities and different prices. The futures market has become a commodity by using the gold is very popular because of their leveraged product.Many of the investors participating in trading gold futures contracts, and these represent an insurance contract with an idea to buy or sell, give or take delivery of a specified quantity of gold or Maggie addition to the actual quality of gold or Maggie, on a specific date arranged, as well as at a fixed rank. And traders can easily choose to receive the real assets of the underlying (in this case gold), or give, on the date of maturity of the contract. This is not very likely, but when futures trading contacts with, and instead is directed in the price of the underlying assets in the market and speculation in the market will do in the future. This makes the market speculation in the future for the gold trade is very volatile.Gold futures contracts as well as the alloy to allow the investor to take a position long or short. An investor may wish to take advantage of a future standard, as it also provides them with liquidity and prices that are 'in real time. Among the other advantages of the gold traders, many of the futures contracts are traded on margin and leverage. This means that the investor needs to be a small percentage of the initial capital to open the contract. With the ability to benefit from trade with the risks involved in the largest. This can cause a trader to lose and then click the initial expenses.A rule is very important for an investor to realize and fully understand is that the contracts of gold futures is in fact the product of a zero-sum. What this means is that every situation there will be a long-short position which corresponds to it. So, in the case that there are commercial companies (hedgers) who take short positions, and they are thriving and the market is going in their favor, then the long-positions (speculators) will be losses.Hedgers and speculators in the recent times, but may produce a prosperous market area in the commodity gold. The overall success of any futures contract, which includes that of the gold futures market will inevitably depend on the movement of the gold market during the period or Maggie actual contractual.

A Holistic Approach To Trading Gold

Since the beginning of time, gold was a special place in history. It has been used for the construction of religious idols, and the settlement of political differences and the kings of honor, proving that love, as a currency and, more recently, has been used in commercial operations. Until 1971, supported by the U.S. dollar and gold is still held by central banks around the world for use in times of emergency. It also holds promise for traders - if they can find a trend in this volatile commodity in most cases. (To learn more about gold, see gold standard and re-consider what is wrong with gold?) Background
The Roosevelt administration during the month d the Great Depression in the 1930s until President Nixon took the country off the gold standard in 1971, was fixed price per ounce of gold for $ 35/ounce.After removing the gold standard for currencies, gold prices rose 2200% in U.S. dollars over the next nine years, peaking briefly above $ 800 in 1980. Then spent the next 19 years in a bear market, falling to $ 260, low in 1999 before the start of the next assembly in the long term. But thanks to the easing of restrictions on the currency after the recent recession, the Fed is facing increasing challenges. Effectiveness and usefulness of federal funds over 6% in early January 2001 but by early 2004, the rate fell more than 80% to 1% and the Fed did not start to increase the rate again until June 2004, more than a year after the demonstration had begun. Council has adopted the Federal Reserve position much more adapted to interest rates, which lasted until 2007, and the weak dollar and commodity prices rocket during this year are evidence of this: more than $ 800 gold again in 2007. Although we will not know how high the peak will be new so it's behind us, and increase the volatility seems to be the reality of modern gold. There is a way to trade gold
As you can see in Figure 1, one strategy is to monitor the cases where the Relative Strength Index (RSI) shows the level of extreme poverty, which falls in many cases the tops of the market. It is also common to observe lower levels because the maximum of these signals is often the bottom of the market (shown by red circles). In this case, do not spend all signal RSI has not been confirmed by the crossing of the moving average. It features all trade with the message. In this scheme, we use (blue line) for nine days (Purple Line) and 18-day simple moving averages (injection). (For more information on these indicators, moving averages and read the tutorial.)Another powerful tool for trading, known as the difference, including looking for cases when the price of the asset and move the pointer in the opposite directions. As you can see from the chart below, the numbers from 1 to 3 areas of differences with a positive signal (green), and negative differences (in red). Another good way to increase the signal strength of the stresses to look for support or breach of trend lines (dashed blue lines.The challenge for the trader in the short term as well as bug buy and hold gold is to find tools to help determine when to buy and sell.Let's take a look at some of the ideas of other technical and fundamental to help prevent you from getting overwhelmed by the emotions that accompany this precious metal highly volatile. (For more information about the gold trade, see the use of technical analysis in the gold markets and trade of gold and silver futures contracts.)
Technology tips
One of the simplest technical tools are also among the most useful, and this is the direction. Trend lines are also a great way to confirm the other brands, such as those created by RSI or moving average crossing. Whenever possible, it is best to wait until the trend line has been breached by the implementation of any trade. As you will see from the tables below, you are creating lines of the increasing trend by linking a series of simply measuring the height of the bottoms of the stock where you will find potential support levels. On the other hand, is created by the downward sloping trend lines by connecting a series of lower levels. This simple tool and a perfect vehicle for traders to use to determine the direction of the asset. (For a basic overview of this concept, see the path of stock prices with trend lines.)Moving averages business tool has become popular because they are easy to use and easy to generate in most graphic programs. The idea is to buy when the short term, the medium is moving faster crosses above the slower one to sell faster when the average crosses below the average slower. This works great in the market direction, but not so well in the markets of a specific range. The trick is to know what type of market where you are because of the direction of the market at about one-third on average, and rely on moving averages tool your base can become very expensive. This is where you can help on the lines of direction.RSI is a momentum oscillator which measures the prices. It is also very useful in view the differences with the price. As shown in Figure 1, the RSI hits in many cases, levels of extreme poverty and a decline in the gold price turning points. For example, with the first red circle on the chart, the relative strength index reached an extreme, such as gold in 2006 reached the peak around 725 $.Looking at the concept of the difference in Figure 1 (above), note the differences between the RSI and price. The first green lines on each of the show, and was low relative strength index in the second higher than the first, while the low price of the second was low less than the first. This warns that the merchant is to build purchasing power. Certainly, followed by a rally. Red lines at points 2 show an example of the negative difference.

Basic considerations Intermarket
Intermarket relationships can be useful in the gold trade. As such, it is important to see the euro and the U.S. Dollar Index as well as higher crude oil prices for evidence of gold going to work, but are important for markets outside of the precious yellow metal.It is important to note that the prices of gold has risen in almost every time the dollar has declined (see Figure 3). And when gold rallies and gatherings usually with oil. Economic power, interest rates and two others of the importance of the basic considerations / intermarket. And generates a strong economy, confidence in the local markets, and increase their attractiveness to foreigners who need to buy U.S. dollars for the purchase of shares or other U.S. assets. What is good for the strength of the dollar. Higher interest rates would have a similar effect. Whenever the interest rate received by the Treasury or corporate bonds, more investors and attract these instruments and the better for the dollar.
Put it all together
Let's walk through the character is shown in Figure 1, and put together our analysis after the peak of 2006. First, we obtain the maximum peak in the relative strength index, and then turns down and crosses over the threshold of the RSI 70 (first dashed red line). Next, the nine-day SMA crosses under Saad, 18 days (point A). Did not break the trend line over the long term, but due to the high equivalent in gold leading to the peak, it is always a good idea to draw trend lines in the short term. This trend was broken in the short term on Figure 1 at the same time almost as a sell signal RSI.When comparing the numbers 2 and 3 and the dollar also began to mobilize before gold peaked in 2006, the federal funds rate rose from a low of 1% to 5.25%, which would be good for the dollar and bad for gold. As a result, leaving traders with three good reasons, and two basic technical / intermarket to sell gold.Next, the relative strength index fell to its lowest level before recovering extremist, warning of direction change is possible. This was confirmed by the moving average buy signal crossover (Figure 1, point (b)). And breaking the trend line in the short term (not shown). Looking at the numbers 2 and 3, and the dollar reached its peak, and was dropped again - a good sign for gold prices is stronger.
Find confirmation
Difference between the price of RSI and provides useful confirmation of trade as well. By waiting for confirmation in each trade, and is increased confidence. And more certain of the tools are not relevant, the better. Should be emphasized that comes from the indicators that have a low correlation with each other, and this is why using the technical inputs and essential to confirm the direction of the price and the value of that, but the use of data sets are quite different.

Conclusion
Gold schemes, both in the short term or a long, and tend to include a lot of noise. Because the hardest part of any trade to develop a plan and stick to it, and the combination of vehicles and fundamentals is important to prevent you from shaking of your trade by volatility.As long as the foundations of a sound gold and intermarket relationships strong, and stay in the program mode. But here is the beauty of this approach: if these factors change significantly, and are often accompanied by a technical sell signal is like a broken trend line. You can also get the best game in the gold trade, and will feel the development of the process so you'll be ready to execute when the time comes.

Fake gold bars out of tungsten a counterfeit story

Short-term investments are very optimistic, and irregular, unpredictable and unreliable. However, are long-term investments, relatively speaking, are considered safe and reliable. The precious metals such as gold and silver to be real money, and governments have been degraded precious metals since the night of time. It's all about money and printing fake anyway. Until the stock was losing value, gold was going down steadily, increasing by five percent in U.S. dollars.However, you may 'buy and hold' strategy does not work anymore, such as the subprime crisis has shaken this belief in the development of long-term investment. Now, has joined the bandwagon of gold a safe long-term investment that will pervert treading the path of the mortgage crisis?
Fake story

October, the bankers in Hong Kong for a rude shock when they discovered some gold bullion from the United States that in fact any gold-plated tungsten, and alloys of gold and fake. Act quickly, and Chinese officials found the perpetrators within hours. It seems that imaginary spaces tungsten, between 1.3 and 1.5 million ounces of 400, manufactured in the United States about fifteen years ago under President Clinton. Refinery has been said by the very sophisticated, 640 000 of these panels were gold-plated tungsten and turned into Fort Knox. The remaining gold plated as well, but sold in the international market. (Fort Knox, as you may be aware, is the United States Bullion Depository, where it is stored reserves of gold, the official of the Federal Government, and a deposit of about 4603 tons (4 176 tonness metric) is the depository second gold higher in the United States after the basement of the Federal Reserve (Bank of New York underground in Manhattan (5000 tonness metric of gold), and pulled this one on the gold bullion and contacts within the government, large banks and also among the top manufacturing facility-the-line. For I did, counterfeit is not something new for the U.S. government , this is 1964, when introduced Dimes zinc wearing silver, and for this reason will be assessed before the 1964 coins and more. On the other hand, early this year, another story of counterfeit tours and some have been found on the gold bullion in the coffers of the National Bank to be Ethiopia steel plated with gold, and made news when it was shipping gold from South Africa, but could have been a work of genius and alloys of gold and a fake made of steel are among the easiest to detect as they are lighter. Among the gold coins, 22k coins such as gold Krugerrand, are less susceptible to fraud because the density of 22k gold minted from gold alloy that is 91.67 percent pure, is very far from each other than that of tungsten. Tungsten has the same density (19.25g/cm3), and gold, in the bar and fake can not be distinguished by its weight. For comparison pure 24K gold density within 0.26% of tungsten.
Source: Gold quote.net
The table above shows that although the density of tungsten is within 0.26% of pure gold, making it nearly impossible to detect, it is approximately 5% heavier than gold 22 carats of Kruger. He said that the fake currency differences dimension Carat 22 must be 6 times greater than that of the same coin, of pure gold to the weight of the same. This one is 6 times more likely to detect fraud or currency 22k piece of jewelry made of pure gold bar replicas by measuring simple.Thus, only by the weight of the coins you tell the difference. So why not fake coins and many in the market? Currencies are more liquid and dissemination, but to change hands more easily so probably will be detected and the fake one. The gold bullion on the hands and other exposure to the hands of a few people as possible (the fear of theft). They are quoted in armored trucks, and serial numbers are exchanged and you are far away they are stacked in the basement never to see the light again. Credibility depends on a piece of paper and is easy to forge. Work also involved in the manufacture of counterfeit currency does not make it worth the time the criminal bar of gold. (Cost $ 50,000 to make a fake $ 400,000 gold bar because real gold paint and work on). Gold coins have a lot of details including the number of hills on both sides, etc.. There are a lot of numismatic enthusiasts out there to tell real from fake.
Tungsten: the ideal replacement gold

Tungsten is a steel gray metal found in a rectangular shallow deposits. It's high melting point and very fragile, which makes it difficult to work with when it is raw. Chinatungsten like today, companies are using tungsten in the manufacture of jewelry and coins in the memorial. Chinatungsten even offers an alternative to gold alloy of tungsten. Chinatungsten even boasts on its Web site, and about being "experts who are used to fabricate tungsten bars and disks coated with gold."It is a large-scale, in fact. The question is only since refineries can manufacture high-end counterfeit, and you can have them? Not that made any time before the Chinese counterfeit copies of anything. Incidentally, China is the largest producer of tungsten in the world.
Counterfeit coins and gold trade

Well, the impact of currencies on the trade of counterfeit Gold: GLD Enterprise is a case in point. General Legal Division and the European Training Foundation (Street gold shares), was born five years ago in November 2004, the first institution in the United States to allow stock traders to gain direct exposure to commodity price of the material (gold and silver). Investors in securities and assets can be purchased to track gold prices, and get to know a straightforward, easy for gold and speculation, the purchase or sale. This is the second largest market in the world behind the espionage, with 1117 metric tons of gold bullion in Mammoth confidence value for shareholders. General Legal Division, has in fact been more gold bullion from the central banks of China, Switzerland, Europe, Japan and India.The impact of the General Legal Division is that these commercial activities can affect the world prices directly. So, are they going to dig all of their bars to tell the real from the fake ones? Are they going to tell anyone even if there is only one bar of gold and fake somewhere? What will happen to the investors of billions if it turns out to have a gold and fake? General Legal Division considers the distinction between 'gold' and 'investing in gold. It is not clear what these investments in gold, and it can be anything even remotely related to the gold. That is, it leaves at a loss because there is no independent third party reviews. The value of the Fund should be removed pegged the value of real gold if you do not hold real gold and potential collapse and with it billions of dollars in retirement investment. Affected persons will be more as there may be more than one person owning the same assets, and therefore not entitled to automatic contract material.
Just look at some 'risk factors' listed in the Bulletin of the General Legal Division: "gone are subject to the Trust, and the loss of theft, damage, or impose restrictions on access".
"We may not have the confidence of adequate sources of recovery in the case of gold lost, damaged, stolen or destroyed, and recovery may be limited, even in the case of fraud, and the market value of gold at that time was the discovery of the fraud."
"The ability of the values ??and the Custodian to take legal action against subcustodians may be limited, which increases the likelihood of that confidence may suffer from loss if subcustodian does not use due diligence in guarding the Gold Trust."
In any case anything happens, it can shake the GLD easily for her role in the entire game. However, no one is willing to bet on the collapse of the gold market, and even now. Also, UBS and Goldman Sachs and is expected to increase prices of gold this year. In the meantime, India has bought the world's biggest gold consumer, 200 metric tons of gold from the International Monetary Fund, to protect against dollar weakness. It is expected, China, Brazil and Russia to buy the rest of the gold that the IMF of about 403.3 tonnes.So, the question in the previous section for gold, investment in the long run, should one path is still the gold price? Yes, derivatives such as reliable quote.net gold. After all, it is better to be wise than lucky.