It is really hard to say if it was the investors’ demand or the dealers’ competitive eagerness that brought so many sites to include 24 hour live gold price charts in their menu often monitoring transactions in both London and New York. In one word, live gold price micro analysis is useless, let alone impossible, to the average investor and, if anything, it can impose stock market logic on an entirely dissimilar market and seriously dent your better judgment.
Live gold price for speculation
The gold market is subject to speculation the same as other markets, especially through the use of futures contracts and derivatives. Speculators pay little attention to the fundamental value of gold and instead focus purely on price movements using technical analysis together with sentiment analysis. By feeling the market’s pulse they try to make short term profits buying and selling large quantities of gold over and over during a day’s session.
Same day trading is very popular in the stock markets and private investors as well as professionals often follow this risky practice to make some easy money: having done their homework and before trading starts they bid to buy a large number of a company’s stocks (say £10.000 worth) they expect to do well. They follow the price of the stock live on line and when it makes a 5% gain, they sell by phone or on line through their broker and make an easy £500 minus commission. In the unlikely event things don’t work out their way, they still sell to cut their losses since they really do not have £10.000 to buy the stocks. Sounds pretty good doesn’t it?
The fact is that you cannot do this with gold unless you are a professional trader inside the market. As a private investor you will have to pay in cash (or credit card) for the gold bullion you purchase and if you sell the next day you are sure to have made a loss of at least 3% and a great mess of your investment. Besides gold is a minimum volatility asset: a 5% leap is quite rare for the spot price of gold and it invariably corrects itself before the day is over. For professionals it is their bread and butter to watch gold prices changing live on their computers, but there is no reason whatsoever for anyone else to do it.
Live gold price bulls and bears
Unlike stocks, gold is a precious commodity with inherent, lasting value and a solid foundation to survive economic storms. It has no profits or dividends, it’s been here forever and it is the last investment you should make reacting as raging bulls or hibernating bears; instead here are two stock market quotes that you should find useful:****
“The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Templeton
“Be fearful when others are greedy and be greedy when others are fearful.” Warren Buffett