Gold Trading Tips

While prices for many physical commodities tend to revolve around supply-demand data, gold needs to be treated more like a financial market that responds to fear and anxiety. Gold prices typically move higher in times of crisis and panic. A stock market crash, an unexpected war or terror attacks can lead to a buying frenzy in gold because traders view it as a safe haven and preferable to own instead of paper assets.

Gold prices usually move higher during periods of high inflation, which tend to bring on higher interest rates. Gold futures prices also have an inverse relationship with the price of the U.S. dollar, because gold and other key commodities like oil are priced in dollars. If the value of the dollar declines over time, the price of gold should rise.