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The Eagle Eye: Tips and Tricks for Tracking Gold Prices

This post may contain affiliate links.

You can apply the tip that you need to keep your eye on the ball to a number of different scenarios and one of them is definitely when you are talking about tracking gold prices, so that you can potentially spot an opportunity to buy or sell for a profit.

If you are looking for a source of gold price information and other data, Money Morning has the details on that score. In terms of keeping an eagle eye on your investments and spotting an opportunity to trade, here are some tips and tricks to consider.

Two main ways of tracking gold prices

One of the fundamentals of trading gold is to understand how best to track the price of gold, and there are two main ways of doing this.

The first is to look at what is called the spot price of gold. Put simply, the spot price is the price at which you are able to currently buy or sell physical gold. This will obviously be fluctuating all of the time to a certain extent and responding to general market conditions, sentiment towards gold as a commodity at the time and rising or falling in response to buying and selling volumes.

The other method deployed for tracking gold prices is to look at the price of gold futures. This is the spot price of gold, but for a predetermined date in the future. You can formulate an opinion on where you think the gold spot price will be when that date arrives and whether you think the value will be higher or lower than the future price being quoted.

Influential factors

Gold is a commodity which tends to be viewed in a different way to trading stocks, and has long been viewed by many investors as a perceived safe-haven for some of their money, when stock markets are displaying volatility and when there is economic uncertainty or geopolitical tensions.

The spot price for gold fluctuates continually and the price is constantly being updated. A lot of the price movements throughout the day are likely to be fairly minor, but as with any commodity or stock, the price is influenced by supply and demand and what news markets are dealing with at the time.

It should also be remembered that the volume of your transaction can also help to determine the price you pay. Generally, the greater volume of gold you are trading, the higher the price you are likely to command.

Using the futures price as a trading strategy

In view of the fact that gold is a recognized commodity, there is an established trading path where you can trade futures if that is the way you want to gain exposure to the precious metal.

Futures are primarily used as an instrument to help balance investment portfolios and also act as a hedge against certain currency movements. Gold futures are exchange-traded contracts where you are making a bet based on the price of gold quoted for a specified date in the future.

It goes without saying, that trading gold in this way, exposes you to the sort of volatility that can often be seen with individual stocks.

Look at the bigger picture

There are investors who trade gold on a daily basis, looking for small but regular profits by buying and selling alongside price fluctuations, which is perfectly feasible if you have an eagle eye for detail and trends, allowing you to spot opportunities and trade accordingly.

There are also plenty of investors who take a more long term view of trading gold and what to have some exposure to the metal as part of their overall investment strategy. The thinking behind this strategy is generally that if you have a certain percentage of your portfolio in gold, you are providing a hedge, as historically, the price of gold has proved stronger when stock markets are falling and going lower when stocks are powering ahead.

If your stock investments are falling, the value of your gold holdings can often help to balance things out, or at least that has been the theory for some time.

It is down to each individual investor on how to use gold as part of your trading strategy and how to trade it, whether that is via futures trading or buying physical gold when the spot price is considered attractive to you.

Do also remember that there are often additional fees to add to a trade when you buy gold, so remember to take this into account when you are tracking the price and looking to get involved.

Trading on the go

You want to be able to take advantage of any trading opportunities as soon as they present themselves, which is why it might be worth looking at installing a few apps on your smartphone that will help you to do that.

Virtually every broker now offers clients the chance to place trades via their mobile, and some apps have already evolved to offer extras like Trigger Alerts, which comes with the OptionsHouse app, and allows you to receive notifications when a specified price is reached.

ETRADE is another broker which has an app that offers additional features beyond trading, such as technical analysis, but there are plenty to choose from, so take a look around if you are planning to do some trading on the go.

Sophie Simmons was taught about the stock market from a young age thanks to time spent with her Grandfather. It’s knowledge that she is proud to know, and happy to share in her articles.



FYI:  I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year.  I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home.  If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!).  Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!
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