Reading a Spot Gold Quote

Reading a Spot Gold Quote

As we mentioned in “How to Trade Spot Gold,” when

you trade spot gold, you take a long or short position

in gold while you take the opposite position in the

U.S. dollar. To get started trading spot gold, however,

it is important to understand how to read a spot gold

quote.

As in other financial markets, including forex, spot gold quotes consist of two sides: the bid and the ask. The bid is the price at which you can sell, and the ask is the price at which you can buy.

Before we move on, note that spot gold prices are quoted internationally in U.S. dollars per “troy” ounce. So, a quote of 800 means that one ounce of gold equals $800.

Note that you might receive a quote for spot gold that looks like 800 / 801. This means that you could sell a lot of spot gold at $800, or buy at $801. So, the spread—the difference between the bid price and ask price—is $1.

If you buy spot gold and sell it at a higher price, your profit is simply the difference between these two prices.

The first thing it is important to know about reading a spot gold quote is that the quote looks similar to a forex quote, being represented the same way (XAU/USD). The first symbol listed represents one troy ounce of gold. So the price quote—which may look something like 800 XAU/USD—simply means that one ounce of gold is equal to $800 U.S. dollars. (The dollar amount fluctuates, of course.)

It’s easier to understand trading spot gold when looking at an example. Let’s say you buy a single lot of gold—a lot equaling 10 ounces—at $800 per ounce, so $8,000 total. The spot gold market rallies, and a few hours later you sell the spot gold at $805 per ounce, or $8,050 total. You made $50.

You could also say you made 500 “pips.” What is a pip? Like forex prices, spot gold prices are quoted in small increments called percentages in point, or pips. Each pip represents $0.10

Why invest in gold?

Why invest in gold?

Gold, a precious metal popular in jewelry, is also a

widely used investment. In fact, as investors have

become more knowledgeable about gold investing,

gold trading platforms (particularly online gold trading

platforms) have proliferated, making it easier than

ever to invest in gold.

There are two reasons to consider investing in gold:

A) Historically, gold has been considered a safe haven in times of economic, geopolitical and financial instability. Inflation and currency devaluation are also positive environments for gold, because it holds its value.

B) Gold investing allows investors to gain financially from increasing gold prices (or decreasing gold prices, in the case of short sellers, but more about that later).

Some of those beneficial gold-investing conditions are present today Including:

First, the world economy has slowed dramatically, with the United States in the midst of a downturn unlike any seen since the Great Depression.

Second, political skirmishes continue around the world: This is evidenced by large numbers of workers in China’s Pearl River Delta region being out of work and the growing problem of drug cartels in Mexico close to many of the manufacturing centers. Furthermore, countries such as the Ukraine are facing problems with their economy that could stall further advances in democratic reform. Even wealthy regions of the world such as the middle east are facing economic problems as a result of the drop in oil prices.

Finally, there are the financial markets, which have plummeted in 2008 and 2009: On February 23, 2009, the Dow Jones Industrial Average and the S&P 500 Index both plummeted to near 12-year lows. Investors are concerned.

At the same time, gold traders are a bit mystified because the S&P/Citigroup Gold & Precious Metals Index, a widely used measure of gold prices, is down 45.46% as of December 31, 2008.

But this simply means there is considerable room for improvement—and significant opportunities for gold investors. Just consider the ratio between the Dow/Gold Ratio, which is calculating by dividing the Dow Jones Industrial Average by the price of an ounce of gold. In the past century, many major economic crises—including the Great Depression and World War II—caused the Dow/Gold Ratio to plummet. So, a low Dow/Gold Ratio is widely considered an indicator of how bad a recession is. And during bad recessions, many investors have tried to preserve their assets by investing in gold, thereby driving up the price of gold. As of February 2009, the Dow/Gold Ratio was below 8, which is historically very low.

How can you take advantage of these conditions? You can do so by trading gold. In subsequent articles we’ll explain how. Many gold trading platforms exist, making it easy to trade gold online.

An investment market for Charlie Pallilo

An investment market for Charlie Pallilo

My favorite sports talk radio show in Houston is Charlie Pallilo's afternoon show over at 790-AM, but I've always wondered why the quite bright Pallilo isn't off making millions trading bonds or running a hedge fund. Moneyball's Michael Lewis reports in this CondeNast Portfolio article about a market that is right up Pallilo's alley -- investing in professional athletes:

Wall Street is about to launch a new way to trade professional athletes the way you trade stocks. A piece of Tiger, anyone?

When financial historians look back and ask why it took Wall Street so long to create the first public stock market that trades in professional athletes, they will see ours as an age of creative ferment. They’ll see a new, extremely well-financed company in Silicon Valley that, for the moment, sells itself as a fantasy sports site but aims to become, as its co-founder Mike Kerns puts it, “the first real stock market in athletes.” . . . The athlete would sell 20 percent of all future on-field or on-court earnings to a trust, which would, in turn, sell securities to the public. They’ll also single out the birth of the first European hedge fund that runs a multimillion-dollar portfolio of professional soccer players, the value of which rises and falls with the players’ performances.

As a number of smart people seem to have noticed at once, professional athletes have all the traits of successful publicly traded stocks, beginning with enormous speculative interest in them. Americans wager somewhere between $200 billion and $400 billion a year on sports, and between 15 million and 25 million of them play in fantasy leagues—which is to say that a shadow stock market in athletes already exists. That market may not know everything there is to know about the athletes it values, but it probably knows more than New York Stock Exchange investors know about the N.Y.S.E.’s public corporations. “People worry about lack of transparency in sports,” says the leading sports agent. “My newspaper this morning has two and a half pages of business news and 17 pages of sports. The day after the game, you know Peyton Manning’s thumb is hurt. What do you know about the C.E.O. of I.B.M.?”
 

FXCM EXECUTION ADVANTAGE

         FXCM EXECUTION ADVANTAGE

• No Dealing Desk means No Dealer Intervention*
• 10 banks compete to provide you tight spreads
• Anonymous Trading: Banks can't see your stops and limits
• No conflict of interest between you and FXCM—We want profitable traders!

 

Execution Advantage

Why Trade at FXCM

FXCM's No Dealing Desk* aims to provide transparent and fair execution. Every trade is executed back to back with one of the world's premier banks or financial institutions, which compete to provide FXCM with bid and ask prices. The best spreads available to FXCM are streamed to you with a small markup, which is generally one pip or less for major currency pairs.

Lower Spreads

• Euro/US dollar spread is frequently 2 pips, British pound/dollar 3 pips

• Trade on rates provided to FXCM by multiple global banks

• FXCM's monthy trading volume of over $365 billion drives price competition

• Fractional pip pricing facilitates the tightening of spreads even further

Sign-up for a FREE TRIAL now!

No Dealing Desk Execution

• No conflict of interest between broker and trader

• No dealer intervention in trades

• Price providers (Banks) do not see your stops, limits, and entry orders

• Competition reduces the potential for market manipulation by price providers

No Trading Restrictions

• Trade during breaking news

• Place entry orders anywhere—even inside the spread

• Scalp the market

• Rollover transparency—all amounts are displayed in advance

• Receive positive rolls at all margin levels

Why Trade at FXCM

An average of over $365 billion in notional volume is traded each month on trading platforms offered by FXCM. As a result, we have obtained close banking relationships with some of the world's largest and most aggressive price providers. Having multiple price providers is especially important in volatile markets, when one or two banks may post wide spreads, or simply avoid quoting any price at all. With so many major banks quoting prices to FXCM, there are competitive spreads, even during market-moving news events.

FXCM does not take a market position—eliminating a major conflict of interest. A dealing desk broker, which acts as a market maker, may be trading against your position. With our No Dealing Desk execution, however, we fill your orders from the best prices available to us from the banks. While an individual bank may try to skew its prices off the market, the unattractive price on the bid or ask side will lose the price competition and as a result, not factor into the prices streamed to you. At FXCM, prices are not subject to manipulation by a broker or a banks dealing desk.

While our competitors are beginning to follow our example of offering No Dealing Desk execution, we have successfully implemented it. Excellent bid and ask prices are not meaningful unless you have a reliable trading platform to execute trades. Our trading platform is tested in all market conditions, routinely handling approximately 300,000 trades per day.

While FXCM aims to provide clients with the best pricing available, having all orders filled at a requested rate means execution risks will remain. Read more.

Stock futures set for green light in Taiwan

Stock futures set for green light in Taiwan

Taiwan's financial regulator is set to allow futures trading in individual stocks listed on the Taiwan stock exchange as part of a push to make the country a more sophisticated international financial centre.

"The goal is to offer more options to investors and make the Taiwan market more diverse," said an official at the Financial Supervisory Commission, its top financial regulator. Taiwan, whose stock market was one of the region's star performers in the first half of this year, has looked to expand the regional presence of its stock market in recent months. The stock exchange has aggressively pursued listings by Taiwanese companies that had moved to mainland China, and recently co-operated with Hong Kong to cross-list exchange-traded funds .

Its push to expand, however, comes as its regional peers are also trying to become bigger financial centres. The Hong Kong government has become increasingly active as it attempts to boost the territory's status as the region's leading international financial centre. It hopes to challenge Malaysia as the main Asian centre for Islamic finance and plans to entrench its position as the gateway for investment into and out of China.

Shanghai, Hong Kong's biggest rival on the mainland, intends to allow foreign companies to list on its stock exchange next year as part of its plan to turn the city into a global financial centre by 2020.

Taiwan has in the past found it difficult - relative to its regional peers - to attract international investors because of its rocky relationship with China and also because tight regulation by the Financial Supervisory Commission has meant a relative paucity of financial products. Since Ma Ying-jeou's election as president last year, the commission has, however, gradually moved towards liberalisation.

The addition of individual stock futures to the exchange, which also includes individual stock options, is expected to help boost trading volumes, which havefallen after the financial crisis.
.Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

Software Forex

Software Forex

Making large sums of money is easy once you understand how to use leverage in your forex trading system. It is easy to replace and sometimes even exceed your current income by responsibly leveraging your money through available software forex. The Forex market is making new millionaires every year and some of them even start with a minimum amount of money. Forex leverages your money like no other investment can. If you aren't investing with Forex, you are missing out on what could easily become thousands of dollars per week.

You can start your Forex investments with as little as $500 in fact some traders have even begun with less and turned it into thousands in a relatively short time. This trading method outperforms any traditional stock market any day of the week. Most stock trades need a great deal more money invested to even come close to the returns you can make with Forex trading.

Here are a couple facts to give you a better picture of the earning potential of the Forex market.

First and foremost, it is the most liquid market ever known. Trades can be made instantly. This means that your trades are going to be more profitable because you are locking in your profits as soon as they appear. In a traditional stock trade, you have to put in an order with a broker and wait until they get to it. This can sometimes take a while.

Secondly the Forex market gives you a 100:1 leverage. That is huge all on its own. Now imagine taking that and compounding it with each trade. The numbers can be off the scale. Although you might not get rich overnight, your chances are many times greater than with any other market.

The third factor that makes Forex trading so appealing is the fact that the market for this type of trading never closes down. Forex is a 24 hour market and that creates more trade possibilities, many more. It also eliminates the gaping you sometimes see in a stock market. The trades are easier to track because you can monitor them around the clock.

And there is still one other benefit to leveraging your money with Forex trading. The trades are limited to the number of currencies in the market. This makes technical analysis much simpler because you are not going through many thousands of possible trades.

The Forex market can be traded from anywhere in the world because it is done online. You have the ability to work at your trading any time of the day or night. The amount of leverage in Forex trades can't be matched and, you can start with a very small investment to try it out. These are just a few of the reasons the Forex market is favored by the very rich

Forex Trading Reports Section

Forex Trading Reports Section

I’ve created a section on this site specifically for reports on forex trading systems and other forex related products and services. This makes it easier for anyone who wants to find out more about the Forex Currency Trading Products available in the market place.

It’s relatively new, so there aren’t that many reports there yet. I’ll be steadily transferring research that I’ve compiled over into the Forex Trading Reports section over time.

So far, I’ve added information on these three trading systems:

■FAPTurbo.com
■The 10 Min Forex Wealth Builder
■Forex MegaDroid
If you want to check out the forex trading systems reports section:

The Forex Trading Reports Section