Learning how to trade gold with online gold trading is getting more popular and this is primarily because gold is least affected by inflation during an economical downturn. This is especially so in the present conditions of economical worries around the world, particular the crisis in Europe and stagnation in the U.S. However, exactly what kind of gold you trade or make investments in and how you actually do it is essential if you really want to make consistent profits. I will provide some gold trading tips for you right here.

To start with, buying gold coins is an example of a good investment while buying jewelry may not. By buying gold coins, you are investing for the long term. Some of these coins such as the American Eagle gold coins have intrinsic value as they are made of pure gold. Buying gold coins can be challenging, thus choose the right agency to purchase them from. Additionally, pay attention to the latest gold prices and try to buy when there is a correction in the gold price. Just like any investment, the time-tested investment rule of buy low sell high still is applicable when buying gold coins.

As an alternative, you can contemplate to trade gold online instead of buying gold coins. However, before you do this, it is essential that you must find out how to trade gold the correct way by understanding what factors affect it’s price action. To understand how to trade gold, you need to be well informed of the characteristics of gold. You should also realize the risks involved and take the required steps to diversify your investments.

The following step is to decide what instrument to trade gold. You can do so via spot and online gold trading. Between the two, online gold trading is chosen. The benefit is that you will never ever come in contact with the gold, therefore you will not have to be concerned about its security or safety. You are also in a position to use the leverage available by your online broker when you do online gold trading. This makes it possible for you to buy much more gold with less bucks.

You can expect to make higher returns from using a lower capital. You can trade gold online by buying and selling Exchange Traded Funds (ETF) such as SPDR Gold Trust (GLD). The advantage of trading ETF is you can trade for or trade against gold. This suggests that if you are generally bullish on gold, you can buy the GLD and vice versa. In fact, GLD is now one of the most widely traded and popular ETFs nowadays.

Online gold trading has its pitfalls, just like stock trading. So do your own research first before you put your real money. Learn to do technical analysis of the gold charts to pinpoint the direction of the major trend in gold price – is it likely to continue going up or down. Before you enter a trade, understand your stop loss level which is the price you will get out of the market. A good opportunity to buying gold is whenever the reward to risk ratio is at the very least 2. Watch the trends in the market and trade with the major trends, not in opposition to it. Only by trending with the major trend are you capable of making money consistently in your online gold trading.

Precious metal investing should be an integral part of your overall investment portfolio. People will still prefer precious metals investing to fiat currency, especially in times of economic uncertainties. Precious metals investing includes not just gold, but also metals like silver and platinum. Before you dabble in precious metals, it is important to know that those who succeed in precious metals investment have spent a lot of time and effort to master it. There are also various types of metals that you can invest or even trade. As we continue with the article, I will briefly introduce you to the different kinds of precious metals investing methods as well.

In this article, I will cover silver investing and the various types of silver trading techniques. The most straight-forward way to invest in silver is of course to buy physical silver. You can buy and sell silver through physical stores (if you can find them in your country) or through companies which trade silver products. You can even buy silver online nowadays. A faster and easier way is probably to do silver trading online. The advantage of silver trading online is you don’t need to take delivery of any physical silver, thus saving you some costs related to transport and safekeeping.

More and more people choose to buy silver online. Others choose not to buy silver online because they don’t know how to or they don’t think it is safe to buy precious metals online. However, the level of security and sophistication or online businesses has improved over the past few years and many issues of safety has been adequately addressed. As long as you do your homework and buy silver online from reputable companies or e-commerce websites, you should be safe. It is relatively easy to buy silver online, so one should make full use of it to save time and money. You save money because some e-commerce website offers free shipment if you order above certain quantities of silver coins for example. Moreover, there are so many companies who in order to save physical office space, tend to have online companies which cater to such trading. The purchase of certificates and call and put options are usually done online, therefore making it easier for general public to buy silver online.

Do you know that silver is one of the most used metals worldwide today? It is not just another precious metal – it is also an important industrial metal. Silver is used to make components found in mobile phone and many other electronic products. Silver is also called the poor man’s gold as it is cheaper to buy silver than gold. There is also a growing demand for silverwares. For example, women in many developing countries prefer to wear silver jewelry as it is more elegant and durable than artificial ones. Although the price of silver has risen significantly in tandem with gold, there is further upside for silver. This is because silver is an industrial metal and its demand will start to pick up once the global economic situation improves. As such, you should consider to buy silver online when the price weakens so you can sell it at a higher price when the price starts to increase again.

Here’s a gold trading tips to help you make money in gold trading. Gold is a commodity and therefore its price is subjected to seasonal change. However, due to the instability in the global economy, the impact of gold season is not as easy to gauge as it was a few years ago. So how can you capitalize on the gold season and what are the changes that will affect the gold prices?

In the developed world, the gold retail market activity is slowing down as the summer holidays are winding down. The next peak in gold retail activity will be towards the year’s end when festive season gets underway. There is good support for gold prices because jewelers will start to buy gold from manufacturers from early September as shipping, delivery and new designs take time.

India is still currently the world’s greatest consumer for gold. Its demand for jewelry, gold coins and gold bars accounts for 32% of the world’s gold production, followed by Greater China’s 20%. The typical harvest period in India is during month of August. With families get income from the harvest from the middle of August onwards, Indian investors turn to the gold market.

Indians like to deal in cash and they like to keep them in gold to avoid taxation. However, the Indians don’t buy gold in one gold but during auspicious times during September through May. The first peak for buying gold is in October during the Festival of Lights. Marriage season, where gold is bought as dowry to the groom runs though this period to May.

Besides seasonal factors, another factor that will affect gold price is central banks.  Many central banks are controlling the supply of gold due to the decay in the value of their currencies. More central banks are also buying gold from the market. All these factors will provide high demand for gold.

Here’s a quick update on gold trading price this week by Chris Vermeulen of TheGoldAndOilGuy.com.

According to Chris, gold trading price may have formed a possible double top, which is bearish. From the 4 hourly chart below, we are seeing high volume as price reached higher high. This could mean that big money is unloading substantial positions. Chris mentioned that it is important we keep track of what the big money are doing as it can tell us of possible change in trend.

Based on the current selling volume, be prepared for some correction in gold trading price. But do take note that gold is still in a strong uptrend. So it’s not the time to start selling. Instead, Chris recommends to go long whenever there is pullback. Pullbacks in gold trading price is good for the market as it flushes out the weak positions before the market go for another rally or bounce.

Therefore, if you’re already in the gold trading market, continue to buy on dips until the chart tells you the trend has changed.

With silver trading price crossed the $30 per ounce, some analysts are commenting that the price is now overbought. Although the silver trading price has since made some correction, the fundamentals for silver remain strong. Therefore, any correction should be taken as an opportunity to buy more silver.

The silver trading price was about $15 per ounce sometime last year. It had a spectacular run since then. The playing field begins to change with CFTC taking a stand against price manipulation by big players such as JP Morgan. It is believed that J.P. Morgan holds a massive short position in silver. It is said that the bank of acting as an agent for the Federal Reserve in the market – to contain the silver trading price as any rise will affect the value of the U.S. Dollar. A lower silver trading price helps keep the U.S. dollar attractive and support the value of other fiat currencies.

How JP Morgan and other big players did to suppress the silver trading price is to use the futures contracts offered on Comex. They did this by selling huge amounts of paper silver in the futures market It is believed that these short positions are not backed by any physical silver.

Recently, there are market rumours that the huge sell position held by JP Morgan is causing a squeeze as more traders are demanding that physical silver be delivered and COMEX does not have them in their vaults. Even if this “squeeze is not counted” the fundamentals for silver is as strong as ever.

Basically, the demand for physical silver is outstripping supply now and the precious metal is sold well over the spot silver trading price in some places. The main driver for this is the intrinsic value of silver, which is being used in many industrial applications. The demand for silver is going to increase further as investors around the world start to notice how undervalued is this precious metal and will vie with the industrial users for silver.

There have been rumblings recently in the media covering market pundits who are falling onto the silver investment fashion.  After the Hunt brothers silver debacle of the late 1970s and early 1980s, silver has been the dominating precious metal.  Now, at long last, investors are starting to see the light albeit dimly.  Gold has always been the sexy, shinier brother that gets all the press coverage while silver has taken a seat way at the back of most investors’ portfolios.

Note the spike in 1980 when silver hit $49.45 per ounce, thanks to Herbert and Nelson Hunt’s efforts to corner the market.  It was estimated that the Hunts held over 100 million troy ounces of silver and when the bubble burst, the price quickly fell to less than $10 per ounce.  This left many small speculators holding nearly worthless silver coins and bars and pretty much soured the silver investment community until recently.

Silver investment trapped

Between 1985 and 2006, silver investment price was trapped between $5 and $10 per ounce.  When gold started its long slow climb up to today’s levels, silver started to move up after a slight time lag. Silver started to break out of its multi-year range in early 2006 when it broke through the $10 per ounce ceiling on March 3rd, 2006.  It climbed to a peak of $21 per ounce on March 17th, 2008 and then rapidly headed south as the Great Recession took hold, hitting just under $9.00 per ounce on October 24th, 2008.

Silver started 2010 at $17.17 per ounce.  It moved very little over the next 8 months, trapped between $15 and $19 per ounce until September 8th, 2010 when it finally broke through the $20 per ounce ceiling.  Since that time, silver has climbed rather steeply, hitting a high of $30.72 per ounce on December 7th, 2010.  That’s a gain of 53.6 percent since the beginning of September alone.  Looking back, silver has gained 78.9 percent since the beginning of 2010 and 207.2 percent since it first passed the $10 per ounce ceiling in early 2006.  All in all, a pretty sweet return on what can be a very modest overall silver investment.
 
Many people wonder how to invest in silver.  Since it trades at a low price compared to gold, you can get a lot of weight for your spare change.  A favoured way of purchasing silver is through your local coin dealer.  People are constantly bringing their old silver pocket change to coin dealers thinking that they will strike it rich.  Not so.  Most coins that were in circulation are far too worn to have any numismatic value so most coin shop owners will simply offer their customers a price for the coin that reflects the value of the silver content should the coin be melted down less a discount which ultimately becomes the dealers profit margin.  

Gold trading price is now showing a divergence that may signal a steeper correction in price. The chart below clearly showed the divergence between gold trading price and the RSI as well as MACD. We are still in a up trending gold market. But gold price is getting more volatile and there was a false breakout in November. It looks like gold trading price is going to be range bound as there is currently no sufficient volume to push the price to the next level yet. Therefore, here’s a gold trading tips – the best way to play the gold market now is to use oscillators like the stochastics.

Bulls are still supporting the gold market. But the enthusiasm has somewhat waned as reflected by the decreasing volume as price increases. From the price chart, there seems to be increased profit taking and high selloff during the false breakout in November. Therefore, it is better now to trend cautiously and turn on your trading mode based on oscillator until gold trading price convincingly break the upper trendline resistance. The charts of silver is also showing similar patterns as the gold trading charts.

As more investors and government start to realize the hidden value and start to invest in silver in greater quantity, silver is becoming mainstream. Nowadays, you can read more headlines that read “Gold and Silver…” instead of just gold. It was only a few years ago that silver was regarded as a poor man’s gold and is not found in many investors’ horizon. When central banks worldwide becoming net buyers of gold, will they start to invest in silver as well?

Why Governments Need To Invest In Silver

This may well happen as silver, like gold is also considered money. Silver is important to many government and is going to get more important. You’ve got to understand that it is not the government who decide whether silver (or gold) is money, it’s the people who decides. Besides being a precious metal, silver is  a strategic asset for many governments. So it’s a matter of time before the governments worldwide start to get more involved and invest in silver.

As mentioned, silver is both a monetary and industrial metal. Here are some important 6 strategic areas where silver is needed.

1. Technology – silver is widely used in many electronic and technological applications like the iPod or computers.

2. Energy – there are huge potential for silver to play an important role in this sector, from energy generation, storage and consumption.

3. Consumer – silver has been widely used in many common household items.

4. Water – The world is facing a lack of clean fresh drinkable water. It’s a matter of geopolitical and survival in many third world countries. Silver is expected to play an important role in provide clean water to the masses.

5. Healthcare – silver coated appliances improve the hygiene factor as it kills bacteria.

6. War – due to its physical characteristics, silver is being used in many high tech weapons and will be much sought after for military purposes.

With the aforementioned strategic applications of silver, it is not surprising if governments around the world start to invest in silver and stockpile the precious metal. The fact is that currently, large stockpiles of silver held by government has been used up and most government don’t mine silver. Therefore, they only way most governments can do is to invest in silver and buy silver from the market. Recent data has shown that the Chinese government invest in silver in large quantity has been encouraging its citizens to buy silver coins for investment.

Having said that, governments may not be the only one who invest in silver in large volume. It could well be sovereign funds, state owned enterprises, government linked agencies and others. With gold trading price reaching all time high, many gold buyers are being priced out of the gold market. They start to invest in silver as it is cheaper. Also, many small countries with limited resources will likely invest in silver as they too have been priced out of the gold trading market.

Invest In Silver Now

So the bottomline is this – governments and their proxies have historically been buying silver to mint silver coins. Their silver stockpiles are diminishing and they only way to invest in silver is to buy more from the market. This coupled with silver’s role as a strategic, industrial precious metal will likely cause governments worldwide to invest in silver in more quantity than before. They need to because they need to secure supplies of this strategy metal be it for economic, military or other reasons. When this big buyers move in and invest in silver in large quantity, what do you think the silver trading price will go? Given this scenario, is it about time you invest in silver now?