COMMODITY TRADE – WHY INVESTING IN GOLD COMMODITY IS BETTER

GOLD TRADE – WHY INVESTING IN GOLD COMMODITY IS BETTER
Trading in commodities is an odd mix of safety and high-risks investments. Commodity trading entails dealership in precious metals like silver and gold, agricultural commodities like pork bellies and winter wheat and energy commodities like coal and oil. Silver and gold are sold and bought as physical metals, futures contracts and as ETFs.

Trading in gold

Trading in gold commodities has an advantage over several classes of assets. They are always worth something. Bonds and stock values from bankrupt companies sometimes decline to zero. On the other hand, oil, gold, and wheat always have a significant value even if not the worth of the price you paid in the first place. Loses can be made in commodity trading and for this reason, effort must always be made to buy them with heavy leverage such that your entire investment is not lost. Trading in gold offers excellent trade flexibility in comparison to other asset classes. This is because they are traded amongst two friends as alternatives for currency or on key exchanges in ETFs.

Investment

Much as commodities offer protection against total investment loses, predictions are difficult in the business owing to the volatility and difficulty of some products. The probabilities of a commodity dropping to a quarter of its original purchase price surpass that of commodity stocks going back to zero. There are also no dividends in commodities and there are risks of absolute losses especially when trading in EFTs.
Investors that can tolerate high risks are best suited for commodity trading. On the other hand, it is also a fundamental investment option for small investors and starters who have overwhelming abilities to store hefty quantities of gems like gold and silver. Any investor who foresees a major economic disruption in the future should settle for gold commodities’ investment. This is because of the adequate versatility and flexibility that it offers to a myriad of investors. In addition, it has also been in existence long before bond markets and stocks were established.
Most investors often ask questions about which hot stocks to buy. Several questions have also been asked about which commodities to invest in through India’s futures exchanges. India’s Multi Commodity Exchange is currently the hottest and largest commodity bourse dealing in bullion metals like silver and Gold commodities. This is because India is the world’s largest end user of silver and gold commodities.

Attractive rates

However, it should be remembered that silver and gold though regarded as safe haven assets, are prone to fluctuations in rupee and Dollar rates. This significantly affects gold and silver prices. On the same note, at high interest rates; possession of shares, stocks and bonds are the best investments. When the interest rates are low, silver and gold commodities are attractive because their resale values are greater and they have assured appreciation.
In a nutshell, the advantage that comes with investment in silver and gold stocks is that they are highly demanded in times of inflationary surges and offer high returns in terms of cash for gold. Investors are fully aware that silver and gold commodities preserve their purchasing power predictions on how a currency will fare are hard.