Gold Trading v Interest Rates

The price of Gold is trading back around the $1140/42 level which has proved so pivotal over the last five to six months.

The gold charts look bullish as support levels have been holding out for some time. If you discount the price spike and subsequent retreat of November/December 2009 the trend for the price of gold on the Contracts for Difference (CFD) markets remains ‘higher highs’ and ‘higher lows’.

I am certainly not pro-Gold. On a fundamental level I can see fewer more useless places for anyone day trading to put their funds. With gold you are not providing investment monies for anything at all. Gold is a pure defence play against everything else falling in absolute value.

Having said all that, it does look like the major currencies are weakening. If this continues then, ipso facto, Gold should rally.

If you are looking to speculate on the gold CFD markets then beware of interest rate rises. Eventually interest rates will have to rise and long-dated debt is already showing signs of this. In an environment with high rates Gold may struggle, nevertheless, for now, the metal is enjoying its day in the sun once again.

Whether you think the price of gold will rise or fall you can speculate on the commodity through CFDs. With a regulated CFD trading company like SpreadCo you can trade hundreds of international markets such as Gold, Oil, Stocks and Forex.

Please note though, Contracts for Difference carry a high degree of risk to your capital and it is possible to lose more than your initial investment. Only speculate with money you can afford to lose. These products may not be suitable for all investors, therefore ensure you fully understand the risks involved, and seek independent advice if necessary.

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