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Gold Trading Volume Rises

A recent report has revealed that gold coins are selling at a furious pace in the United States. The last time this happened was right at the beginning of the financial crisis back in 2008. There is market volatility right now, but much of the uncertainty that investors see is based upon guesses and speculation of what might happen in the future.

For us, this is an indicator of two big things. One, consumers are unsure of what’s going to happen in the coming months, and want their money placed somewhere safe. Two, the volume of gold trades may begin to rise. These are both things that short term binary options traders should be paying attention to as there is now a higher probability of success trading binary call options than before.

In times of economic uncertainty, gold is what U.S. based investors turn to in order to offset the losses that they are predicting with their holdings in the dollar and the stock market. Gold is one of those assets that people keep turning to, and because they’ve been doing it for so many centuries, they keep doing it. Like any asset, it only has value because people demand it, and thanks to its scarcity, gold’s value keeps rising. It’s only when there is noticeable momentum that the short term trading of this commodity begins to have any sort of value. Now seems to be one of those times.

By trading off of uncertainty, we can step back and see the reasons behind the uncertainty, and figure out how to profit off of it. Warren Buffett, the famed billionaire investor, is reputed as saying something to the effect of, “When people are being cautious, be greedy. When people are being greedy, be cautious.” This is good advice for value investing because when people are cautious, they sell their assets off and price drops. Buying cheap and holding is one of the cornerstone principles of long term investing. What does it have to do with trading gold?

We see people being cautious about stocks and currencies and turning to a commodity. They are cautious and hedging their bets in case calamity occurs. An economic disaster would be awful, but by being smart and staying ahead of the crowds, it is possible to avoid seeing the losses that others will see in their 401(k)s and IRAs. Short term trading is a way to accomplish this. So while people are cautiously unloading their investments, we can either jump in on the rising price of gold with binary options that rise at a faster rate than the price of gold, or we can go short on the assets that they are unloading.

On Thursday, November 12, the gold futures chain saw an increase of over $5 per ounce. Over the course of a day, that’s a huge increase for this particular asset. The major indices dropped by over 1 percent on this day, and gold rose instead, albeit at a rate of 0.54 percent. The rates will not be identically opposite, and that will lead to some unpredictability, but for the most part, in situations like this, prices can be much more predictable than usual. This is a good time to take advantage of the situation, even if others are panicking. By increasing your knowledge of the worldwide markets and how they interact with each other in the context of world events, you can be greedy when other people are backing out of positions and take on a profitable short term approach to trading, even when other people are losing more and more of their money.

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