First, we need to understand the economics behind the Gold and why it is considered as the safe-haven demand in a time of uncertainty. Gold is a universal commodity and has its importance in all economies, religion, etc. And on the other hand, its availability in nature is very scarce.
Now, another important point to keep in mind is that it is having a negative correlation with the stock market. Its been seen that whenever stock markets perform poorly then Gold starts getting strength. There is a common tendency of the majority of people to invest in gold as a safety measure against different types of uncertainties like war, political instability, inflation, etc. That is the reason behind ‘gold’ to be a safe investment instrument when the stock market is not performing well. Usually, big players and the majority of other investors divert their investment into gold to safeguard their return
As we know the demand for gold is evergreen and we do not have any other alternative instrument with such a high probability of future demand and also the production of gold is also very limited. If we see big fund houses, big banks, portfolio managers, fund managers, and other financial intermediaries; they all have some percent of their funds to be an investment in gold.
How can we help you in trading in GOLD:
Selling, when the bullish candles are getting everyone else into buying is how you survive, while others have blown up. you just need to be a bit precise with your levels to give yourself the best odds of success.
Feds are pumping billions of dollars in the market on a daily basis in REPO transactions from the middle of September and if by the end of October they don’t see any improvements they might enter the market directly and start buying Treasury bonds themselves, which would destroy the value of USD.
so naturally there is a big demand for gold throughout the world as central banks brace for Financial Armageddon.