At present, there are many kinds of gold investment products in the world. According to the direct and indirect investment gold classification, the former mainly has physical gold, paper gold, gold futures and gold spot margin trading (London gold), the latter is represented by gold fund. Which product is the most suitable for investment, may wish to refer to the following important factors to help you decide.
|Margin of Spot Gold||Physical Gold||Paper Gold||Gold Futures||Gold Fund|
From the table can be seen, the flexibility, the gold spot margin to provide 24 hours of realtime trading, high liquidity. Physical gold cash flow is low, need to visit the bank or physical gold commercial firm, and investors need to deal with their own storage security issues. Gold fund transactions need to be specified in the daily trading hours, every day there is only one price. Two-direction trading is also an important consideration, every market will go through the bull market and bear market cycle, compared to physical gold, paper gold and gold fund investors can only buy low sell high, can only leave the market when bearlish. Gold spot Margin trading allows investors to build long or short position at any time, no matter gold price rise and fall, still can be profitable. For the time being, gold spot margin trading and gold futures are 24-hour two-direction trading, but the threshold, the gold futures are quite high, each lot margin cost 5,000 US dollars or about, not the average investor can afford. On the contrary, the gold spot margin trading threshold is very low, each lot margin only 1,000 US dollars, leverage up to 100 times.
Gold spot margin trading risk
In summary, gold spot margin trading is better than the other four investment products in comparison. However, many investors have doubts about such gold margin products, mainly because of the “leverage” word has a wrong understanding, the “leverage” equate to “high risk”. Investors do not need to pay the full amount of funds to deal with the transfer, just pay a certain percentage of the total amount of margin, you can achieve up to 100 times of leverage, get a greater return on profits. Undeniably, this is indeed a very high risk of investment, the market price very small changes will also have a great impact on investors. But in fact, the leverage depends on how much margin you put in. Investors may increase the amount of margin to reduce the leverage ratio, which will greatly reduce the risk of market volatility. For example, when the gold price is $ 1,000 per ounce, if the
deposit is $ 10,000, the postion is 0.1 lot and the leverage ratio is 1: 1. In addition, the gold spot margin products are equipped with a stop loss system to reduce investment risk.
Advantages of precious metal investment
Gold is used as hedging tool? As investors think the fund charge transparency is not high, or don’t understand the operation of the hedging funds and then are not willing to invest related hedging tools, they can choose to use spot gold investment as one method, because investors can choose to buy long or short.
Gold is a kind of permanent thing, of which value is recognized internationally. From the ancient times to current time, it plays an important economic role.
Buying long or short
In gold investment, in addition to buying at low price and selling at high price, you can also buy long at high price and close a position at low position to be profitable. So, you can have more flexible operation.
Transaction at any time
In the general investment market, there is only about 4 hours of trading every day, and the gold trading time is generally from 8 a.m. on Monday to 4 a.m. next day (on Saturday, it is at 3 am), investors can undertake local London gold buying and selling. The world public market of gold has no crude and stop, making the gold market investment more secure. Gold is always regarded as the resource with a store of value; when there is geopolitical instability, or increased risk of the investment market, the market outlook is uncertain, with currency devaluation, and the inflation is more serious. Each investor will take investment in gold as money refuge. The most ideal tool against inflation is in recent decades, the currency shrinking situation caused by inflation is severe. Gold will increase by following the inflation accordingly. Gold investment is the best way to avoid being eroded in inflation.