Gold is one of the most favourite investment instrument in the world.People from all communities,all countries and all social classes have shown interests in gold investments.Although as a trader we just see gold as a another trading instrument, women have various emotional values attached to it.India is the biggest importer of gold.Gold is majorly bought in India in marriages & festivals.Even wearing the gold jewellery is a status symbol in India.As a result we have seen people accumulating gold at every available price and reluctant to sell even if the prices go down.This has been a very common trait in middle-class families where gold is sometimes the only investments they have.The gold hasn't deceived them either.See the price rise of gold in India in last 42 years.
In the trading world Gold is always seen as a secured investment.The trend of buying gold by families has majorly been taken over these days by The Central Banks from various countries.This shift in buying interest of Large Fund Houses and Banks is more ignited by the recession in the equity markets in the last few years.With the stock prices becoming more and more volatile and the economic conditions getting worse day by day,the fund houses are buying gold as a safe investment and this trend is here to stay for a long time.
As a trader i think Gold is one commodity that should always be in every body's portfolio.This would not only diversify your portfolio but also hedge you against stockmarket crashes.In stockmarket crashes the money that comes out of stocks generally tend to go in gold and the prices of gold surges up.So even if the stocks will come down your portfolio will be stable.You can buy gold in different ways.You can buy gold in physical form and put it in your bank locker or you can buy Gold ETF's.One can also buy e-gold if he or she doesn't feel uncomfortable without delivery of goods on your paid amount.You can buy gold futures on MCX and NCDEX in India.With futures you have the benefits of trading on margins.You can easily rollover your positions from the current month to the far month in futures.The most important benefit that you get in gold futures over other type of gold investments is that you can short a future if you are bearish about gold.Whereas in conventional markets you can take profits only when the prices rise after your buying.
Now that we know Gold is a relatively safe investment as compared to stocks and it has also provided the buyers with some good capital gains over the years, the question comes when should one buy gold.The important thing to notice here is........ What is the time horizon of the investor?
If the investor is going to hold his investment for two to three years he could just buy the gold at any time of the calender year he or she is comfortable with. He could either buy a Gold ETF or he can buy it in the physical market also.But if the buyer is a trader and doesn't want to hold his investment for long, here is a little research i have provided in the enclosed excel.The data here in the excel can provide the holy grail of gold trading to the Gold traders.This excel describes the monthly end of the day settlement price of gold on Comex for the last 10 years.I have also added here the quarterly and half yearly returns of gold in the excel. Here in these calculations you can see that the average returns of gold on comex in first calender half
is only 1.89% whereas the average returns of gold for the second half is 10.25% every year.I think this study of averages has given the smart traders the idea of trading gold for maximum profits in as less a time as possible.So next time you wish to trade gold you should be buying it on 1st July and selling it back on 31 December.
10yeargoldata
That's it from my side in this post.........wish you happy trading in gold.....
Regards,
Sanjeev Parmar.
In the trading world Gold is always seen as a secured investment.The trend of buying gold by families has majorly been taken over these days by The Central Banks from various countries.This shift in buying interest of Large Fund Houses and Banks is more ignited by the recession in the equity markets in the last few years.With the stock prices becoming more and more volatile and the economic conditions getting worse day by day,the fund houses are buying gold as a safe investment and this trend is here to stay for a long time.
As a trader i think Gold is one commodity that should always be in every body's portfolio.This would not only diversify your portfolio but also hedge you against stockmarket crashes.In stockmarket crashes the money that comes out of stocks generally tend to go in gold and the prices of gold surges up.So even if the stocks will come down your portfolio will be stable.You can buy gold in different ways.You can buy gold in physical form and put it in your bank locker or you can buy Gold ETF's.One can also buy e-gold if he or she doesn't feel uncomfortable without delivery of goods on your paid amount.You can buy gold futures on MCX and NCDEX in India.With futures you have the benefits of trading on margins.You can easily rollover your positions from the current month to the far month in futures.The most important benefit that you get in gold futures over other type of gold investments is that you can short a future if you are bearish about gold.Whereas in conventional markets you can take profits only when the prices rise after your buying.
Now that we know Gold is a relatively safe investment as compared to stocks and it has also provided the buyers with some good capital gains over the years, the question comes when should one buy gold.The important thing to notice here is........ What is the time horizon of the investor?
If the investor is going to hold his investment for two to three years he could just buy the gold at any time of the calender year he or she is comfortable with. He could either buy a Gold ETF or he can buy it in the physical market also.But if the buyer is a trader and doesn't want to hold his investment for long, here is a little research i have provided in the enclosed excel.The data here in the excel can provide the holy grail of gold trading to the Gold traders.This excel describes the monthly end of the day settlement price of gold on Comex for the last 10 years.I have also added here the quarterly and half yearly returns of gold in the excel. Here in these calculations you can see that the average returns of gold on comex in first calender half
is only 1.89% whereas the average returns of gold for the second half is 10.25% every year.I think this study of averages has given the smart traders the idea of trading gold for maximum profits in as less a time as possible.So next time you wish to trade gold you should be buying it on 1st July and selling it back on 31 December.
10yeargoldata
That's it from my side in this post.........wish you happy trading in gold.....
Regards,
Sanjeev Parmar.
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