gold investment, silver investment

Precious metals investment terms A to Z

Forex

The foreign exchange (forex) market is an over-the-counter currency trading market that allows buyers and sellers to trade foreign currencies. The Forex market is the most liquid in the world with an average traded value of $1.9 trillion per day. The Forex market is operational 24 hours a day and five days a week. Individuals from all over the world can trade freely through forex trading.

Forex is a unique transaction wherein traders buy and sell at the same time. Trades are done in pairs such as EUR/USD and Euro/JPY among others. The turnover in forex trading is around 30 times larger compared to the total volume of equity trade in the US. Despite its scale, forex is rather new for some people because it was only made available to the public in 1998. Prior to that, only banks, large multinationals and big currency traders were allowed to trade foreign currencies.

If you are trading forex with a dealer, the forex quote will be two sided, consisting of the “bid” and “ask” prices. This will be listed when you’re dealing with currency dealers. For example, EUR/US may look like 1.2380/1.2385. In this instance, 1.2380 is the “bid” price while “1.2385” is the “ask” or buy price. The “bid” price is the amount at which you can sell the currency while the “ask” price is the amount at which you can buy the currency.

The two-sided currency is quoted against you. Traders buy currencies at a price that is higher than the sell rate. This technique allows currency dealers to get a “commission” without charging their clients directly. If you are interested in forex trading, it is important to keep this “commission” in mind and dedicate significant amount of time to analyzing the market.

Forex Gold

Gold historically was an important currency. To this day it sometimes is considered one, even though the international financial system is now based on the idea of fiat money. In a way, the yellow metal straddles two asset classes: currencies and commodities, in that most asset managers would probably put it in the basket of commodities. One manifestation of this fact is that gold is not traded in the forex market but rather via other channels.

So, there is no such thing as forex gold per se, but even if gold is not traded in the forex market, it still can be accessed by investors and traders. We have a detailed answer to the question: How do I buy gold? And once you know how to get into the gold market, you might appreciate our gold trading tips. The fullest way to experience our analysis of the gold market is to subscribe to our Gold & Silver Trading Alerts. Our alerts give you access to detailed daily commentaries featuring charts like the one below, which was published in our Gold & Silver Trading Alert on April 12th, 2018.

Gold - Continuous Contract

This chart was part of a longer piece on the reversal we saw in gold in April, its surprising nature to many investors (but not to our subscribers), and the potential targets for gold (one of them marked by the red circle on the above chart). In this particular alert we did what we tend to do daily: we provided our readers with a discussion of various developments in gold, silver, mining stocks, the U.S. dollar and we boiled down the situation to the most essential factors which, in our opinion, were likely to drive the price of gold, silver and miners. In this particular alert it was our assessment that we saw a major reversal in the entire precious metals sector, which was confirmed not only by a significant price movement, but also by huge volume levels. In our opinion the reversal that would start a big decline in the precious metals sector was highly likely.

This one specific alert aside, on most trading days we compile all the factors we see as relevant to the current situation and we strive to provide our readers with a sense of what is going on in the gold and silver market. This can help in separating the real signals from the noise we see in the market all the time.

Forex Silver

The white metal shares many characteristics with gold. For instance, silver is still sometimes considered a currency. Silver transcends the same two asset classes gold also does: currencies and commodities. Presently, silver is not traded in the forex market, so the concept of forex silver doesn’t really exist. Still, there are other ways to access the silver market. We actually have a list which might help to answer the question: How do I buy silver? Getting to know the workings of the silver market might be helped by our silver trading tips. The fullest way to experience our analysis of the silver market is to subscribe to our Gold & Silver Trading Alerts.

The same Gold & Silver Trading Alert from April 12th, 2018 already cited before also included an analysis of silver. One chart from this alert is shown below.

Silver - Continuous Contract

In this alert we discussed the outlook for silver and suggested a potential target for the white metal. It is marked with a red ellipse on the chart. In our assessment, the situation in silver was in agreement with what we saw in the gold market and that both metals were likely to go lower from that point forward. So, our alerts provided indications not only for gold but for silver as well. Actually, they tend to include the analysis of other markets important for the situation in gold and silver as well.

If you'd like to see how we trade the forex market, we encourage you to take a closer look at our Forex Trading Alerts. However, if you're not ready to subscribe at this time, we encourage you to sign up for our free mailing list - you'll stay up-to-date with our free analyses, including free forex articles. Sign up today and you'll also get 7 days of access to our premium Gold & Silver Trading Alerts. Sign up now.

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