Gold market is one of the most important markets. Many traders love to trade gold. Gold recently broke above $1,300/ounce price level. As a gold trader, you need to understand the fundamentals that drive the market. Fundamentals keep on changing and with them the market trend. Right now crisis in Ukraine and Middle East are driving the market. Or is it? Watch the video below that explains what is really driving gold now.
“I’m not that surprised,” said Gero, who was one of the first people to trade gold futures contracts four decades ago. “Gold is terribly misunderstood. Gold, essentially, is what you need to maintain purchasing power over the years – and maintain asset protection over the years – of some portion of your portfolio, not for geopolitical events that actually come and go.”
Economic data releases later this month are going to determine gold’s next move. In order to go long on gold, you will have to discount all the positive news about the strong US economic recovery supported by solid jobs data releases in the past few months. On the other hand, if the US economic recovery is really solid, FED will be forced to raise the interest rates much sooner than expected. Increase in interest rates will be a bad signal for the gold market.