If you are in the market for a secure storage of wealth, precious metals are a good area to look into. Gold, in particular, is renowned as an excellent inflation hedge during times of economic crisis while silver has gained huge popularity as both a favoured asset class and an in-demand, industrial material. If you want to trade gold in Singapore, there are numerous ways to strive towards a good return. In this post, we will explore good methods for optimising your returns.
Trading vs. Investing & Value of Gold
Like any asset class, the price of gold is vulnerable to frequent fluctuations. The appeal of this material as a secure store of wealth is borne out by the fact that the gold price tends to rise during times of economic decline, while it falls in line with demand as the climate improves. This is why gold futures reversed a three-session skid recently, as continued political drama in the Eurozone and a decline in the U.S. Dollar (USD) damaged investor confidence and sent demand for the haven asset soaring.
When determining the best method for trading gold in Singapore, however, you first need to understand regional influences and the numerous applications of the metal. In nations such as India and China, for example, gold is widely used for jewellery making and is therefore subject to less predictable price movements. This increases exposure, risk and volatility, and it is an important consideration as you research both the asset class and the regional marketplaces.
When it comes to executing individual trades, gold is the type of asset that demands a long-term outlook. This is what typically separates investors from traders, as they look to store assets and wealth indefinitely while looking to capitalise on longer-term trends. Although it is possible to trade gold and hold positions for a shorter period of time, the lack of liquidity and price movements associated this asset means that such an approach is far less lucrative.
Appraise Your Precise Investment Vehicle
Trading gold in a nation such as Singapore may offer more flexibility to investors than it would be in other regions. As a result of this, there is a wide range of investment vehicles through which gold can be bought and sold, from traditional options such as commodity trading to contemporary alternatives like exchange-traded funds (ETFs) and futures. The latter is probably the best option for gold traders, as while ETFs offer reduced fees their core advantages are not necessarily relevant to investors with a long-term outlook.
The Last Word
While it is possible to trade gold in a number of alternative ways, it is generally best suited to investors with a long-term outlook and a core understanding of regional markets. To strive towards good returns, you should choose a trading vehicle that is most compatible with your philosophy and expectations.