Trading in gold has always been a popular investment choice worldwide, and India is no exception. With its cultural significance and historical importance, gold holds a special place in the Indian market. In this article, we will explore whether trading in gold makes sense in India, considering factors such as market trends, demand-supply dynamics, and investment opportunities. Gold has been the object of trade before currencies were established. Being a prized precious metal, gold has incited the interests of traders and businessmen since time immemorial. Due to its prevalence in the middle ages, India, amongst other countries had gold currencies. But now, due to its rarity, gold production and trade is an exceptionally important economic instrument. Gold reserves for various countries and financial institutions speak volumes about their net assets.
Conducting a CFD trade in gold is an interesting affair:
With both investments and predictions having tremendous prospects in this field, CFD trading in gold has immense potential for both the seasoned and the uninitiated trader. The rise in the value of this precious metal has been substantial over the years and a staggering annual growth rate of over 21.9% over the past few years can be attributed to major multinational events.
Why trading in gold is a safe investment for the business?
Gold, as a precious material, is a rare and finite resource, and therefore, you can consider it overall safe for business, trading, and speculations. With a high-profit yielding value, gold regulates a majority of trading volumes worldwide. Gold as an asset is a very safe instrument for business. It is also a very attractive investment option during times of inflation as well as deflation and also helps in your portfolio diversification.
Currently, available data indicate that gold has the largest market share in the world of trading, with more than 7.3 trillion USD of transactions happening. Approximately 70 billion USD worth of gold is traded each day.
How can the Indian trader perform a CFD trading in gold?
If the interested Indian trader is willing to take the risk of speculating the prices of stable and high-value global market assets like gold, buying a Contract for Differences for gold is a highly-prospective venture. In the case of a gold CFD, the trader needs to pay a fraction of the asset value like physical gold, mining shares of gold, or financial instruments like ETFs, futures, etc. These options enable the user to own the right to earn profits or incur losses based on the speculation of the price change of the asset over a particular time interval.
If the trader is confident that the price trends will be bullish, he can hold the asset or ‘go long’. In contrast, if the trader feels that certain global events might cause a drop in gold prices, he can opt to ‘go short’ or sell off his contract. Though there is no ownership of the original asset or the right to possess its stocks or shares, the rise in gold prices will be instrumental in the increased profit margins of the trader.
The skyrocketing trends of gold prices:
Gold has been breaking its own records by growing at a superlative rate amidst negative forecasts for other economic assets and business ventures. The current trend demonstrates the gold trading prices at XAU/USD 1817.75 with a 0.43% hike in the present session. The growth rate of gold is astonishing at 20% year-to-day, and the metal has already grown by 300 USD since January this year. The bullish sentiment of gold continues to dominate its technical and fundamental pictures and will be instrumental in the massive surge in prices according to the market analysts. The forecasts predict gold to rise up to 1900 to 3000 USD and break all previous record highs!
The primary reasons for the skyrocketing trend in gold are-
- It has reinforced its traditional safe-haven status for investment and is also a major economic instrument of risk aversion.
- Any good news sparks the risk appetite and spikes a prolific rise because of its regime change and the property of being an inflation-hedge asset.
In the End
With India being one of the ancient centers of gold trading across the world, the traders should leverage their skills and trading panache by making investments in gold CFDs and other forms of gold trading to overcome the economic slump that has plagued the entire world due to the unforeseen pandemic.
