How is gold traded in commodity market
This highly liquid precious metal contract is cash settled in rands and can easily be accessed through JSE Commodity Derivatives members. These contracts are also traded by speculators who assume how is gold traded in commodity market price risk that hedgers try to avoid in return for a chance to profit from a favourable price movement.
Gold is primarily bought as an anti-inflation hedge. It is also used jewellery and for industrial use. These contracts can be effectively used by commercial consumers, producers and fabricators of gold with a view to managing price risk.
Producers can employ a short hedge and end-users can use a long hedge. Speculators also use these contracts to profit on short-term movements in the Futures Contract price. To access this product, register as a client with an authorised JSE member firm, deposit the required initial margin and sell or buy according to your needs.
Turn on more accessible mode. Turn off more accessible mode. Who is this for? Features Offers ongoing trading opportunities, as gold prices respond quickly to political and economic events. Serves as an alternative to investing how is gold traded in commodity market gold bullion, coins and mining stocks. Enables effective price risk management and the evaluation of current and future world supply and demand.
Enables identification of short- and long-term price and volatility patterns. Hedge or gain exposure based on expectation of directional price, spread movement or volatility in gold. Gold prices are sensitive to political and economic uncertainty, interest rates and currency valuations, which pose downside risks that can lead to significant losses. How to get Gold Futures and Options To access this product, register as a client with an authorised JSE member firm, deposit the required initial margin how is gold traded in commodity market sell or buy according to your needs.
Copper Futures and Options.
Commodity trading covers the buying and selling of a large range of instruments including oil and gas, metals such as gold and silver and soft commodities like how is gold traded in commodity market, coffee, wheat and sugar.
Commodity trading is as old as the financial markets, and perhaps even older than that. The first example of an organised exchange for trading commodities dates back to Amsterdam in These days there are a whole host of markets available to trade with just a few clicks of a mouse or taps on your mobile device, but some commodities remain as popular as ever.
There are a range of commodities you can trade, including agricultural commodities such as corn, how is gold traded in commodity market and wheat. It's the energy markets, in the form of oil and gas trading, and metal markets like gold and silverhowever, that tend to be more popular with traders these days.
The commodity markets are traded in a similar way to other types of financial markets, but there are some points to be aware of in order to avoid any shocks or surprises when dipping your toe into commodities trading. In this article, we focus on two of the more actively traded commodities: As these are slightly different blends of oil, the prices vary depending on which one you are trading. Prices don't just depend on how much oil is being pumped out of the ground, for example.
As economies slow and demand drops, the price of oil and other commodities also tends to follow suit. Since oil prices are also impacted by world events such as politics and socioeconomic situations, including the Middle East crisis, it helps as an oil trader to keep on top of news so as how is gold traded in commodity market to get caught out by an unexpected shift in oil prices.
Other factors influencing oil prices include decisions by the Organisation of Petroleum Exporting Countries OPEC and other major oil producing nations, such as Iran, on how much oil is produced and supplied to the market. An ability to try and forecast how well or badly the world economy may how is gold traded in commodity market in the months ahead is a definite plus point when it comes to trading a commodity like oil. But there is plenty of news that can cause fluctuations in the price on a day-to-day basis — and on an even shorter-term scale than that.
If for example the US releases figures that show its economy is improving more quickly than expected, this could cause a surge in the price of oil as traders start to bet that demand will increase, consequently putting up the cost of a barrel.
Or it could be that an oil-producing country resists international pressure to stabilise oil prices by increasing production. This could see further slides in the oil price as investors worry that more of the commodity will be produced than is needed. It really is a market that can be buffeted by plenty of world events, so it pays to stay on top of major economic news releases.
Another enduringly popular commodity is gold, which has long been considered a store of wealth and has held a special allure for many of us — as the Californian gold rush back in the s would undoubtedly attest.
How is gold traded in commodity market, in times of trouble and market volatility, gold is perceived as a 'safe haven' — somewhere for investors to store their money away from other riskier assets.
Although the yellow metal can in theory be traded in many currencies, the typical market quote is to price gold in dollars, usually as 'dollars per troy ounce'. This relationship to the US dollar is an important one and is another factor that will have an influence on the price of gold. If the dollar becomes more attractive to investors and starts to rise, the how is gold traded in commodity market of gold will usually drop. In recent years, some people have seen the How is gold traded in commodity market dollar as a safe haven for their money and that has reduced the appeal of gold.
This is another aspect to weigh up when trading gold: For example, if the US central bank, the Federal Reserve, decided to cut interest rates, this would normally weaken the US dollar and lift the price of gold. How is gold traded in commodity market with oil, because gold is such a global commodity it pays to keep a watchful eye on the major economic announcements such as interest rates and unemployment figures, which are released on a regular basis.
The energy markets are also popular among commodity traders. The advent of renewable energy has generated added interest for commodities such as national gas, heating oil and gasoline. One way to get a feel for commodity markets is to watch their moves over a period of time so you can experience the sort of things that happen and understand what makes prices change. CMC Markets is an execution-only service provider.
The material whether or not it states any opinions is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is or should be considered to be financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.
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