If you are a gold investor, you must understand the historical and well as the current gold rate, understand how to read the gold charts, particularly when the price of gold has reached an all time high.
Gold is considered to be a community, irrespective of who produces the commodity, the brand name or the country of origin. Like other commodities, gold price is based on the market which means that the price of gold relies on the theory of supply and demand. Gold is slightly different from other commodities as the price is influenced by the currency used for trading gold.
Trading of gold started out as a basic trading with a seller and the trade started immediately. The immediate exchange of money and goods is called Spot trading today.
The term Spot trading is used when delivery of gold occurs immediately during the time of trade. The problem with trading of this type is that it is not useful while trading on gold as it takes time to discover, refine and extract gold. The producer is required to spend money to acquire gold and the consumer can hardly guess the price of gold. This gave rise to the concept of Forward Contract. In this kind of trade, the buyer and seller agrees to a price based on the fixed quantity and fixed date. In this case the price of Forward Contract is determined first and the transaction is completed in the future. Futures Contract is an even more complex type of Forward Contract. This process is so complex that it requires its own exchange that operates like a stock exchange.
Gold rate can be the current gold rate at which it is currently trading, the futures contract price, contract price and the forward contract price. A gold chart consists of graph with time on the horizontal axis and the price on the vertical axis. The current price is plotted on the graph and the same process gets repeated for each day. A line joining the different points completes the graph. A gold chart can help representing day of trading, month, week and hour as well as any other time frame. Traders with the help of gold chart can spot patterns that help determine factors influencing current gold rate and that might influence the future gold rates as well.
Candlestick chart is another type of gold chart, which describes the daily ups and downs in gold rate in context of a larger time frame (suppose a month). A single point on this gold chart can record closing, opening, daily low price and daily high. When plotted over 30 days, this chart offers a lot of information together with price volatility.
The current gold rate is an important criterion for economic stability. Tools such as gold charts help traders gain a better understanding of the gold market. So, make sure to refer to the gold charts for a better understanding.
Gold-Eagle has been a leading research destination for investing insights and commentary on gold, other precious metals, and the economy in general. We offer you articles, technical analysis, charts and current gold rates. For information of gold as an investment, you may also visit Wikipedia.
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