NORTH PORT, Fla., Sept. 11, 2013 /PRNewswire/ -- Gold prices have always been a thing hard to determine and the recent quick but significant volatility in the gold market only adds up to its long-known unstable history. The sharp, rapid price declines have left brokers, traders and the common public clueless over the position gold will take in the next coming days.
It all began in February 2013 when gold prices plummeted after staying consistently high for over 13 years and this metal is looked upon as one asset that held true value for years together. The precious metal fell from $1800 to below $1200 per ounce.
"It is highly uncertain what will happen to gold prices over the next couple of months," says Dmitri Chavkerov, CEO of Forex Peace Army, world's most trusted website for forex managed accounts performance testing.
Not only did the fall in gold stature break the popular myth that gold would touch $2000 soon, it also gave way to short gold rallies in the world market. This, eventually, led to the increase in gold price again. According to Dmitri Chavkerov, the most recent run up in gold prices from around $1,180/ounce to more than $1,350 was largely due to the fact that more than 60% of the short positions that were built up into June were liquidated.
"Because of relatively stable economic conditions in the US and the bullishness in the stock market, many investors, including large institutional funds, were taking profits at higher gold prices in the beginning and middle of this year. This also attracted many shorter term traders that started shorting gold, which created an avalanche in prices," says Dmitri Chavkerov.
On the face of it, it all seemed perfect for traders shorting gold but again there was a twist in the market. Gold day traders need to keep in mind that though gold prices go down from time to time, it is difficult to predict if it would remain that way or take a completely different course. It is better to be wary of the fluctuations, read market outlook on sites such as Forex Peace Army and take adequate initiatives to prevent facing loss by shorting or going long on gold blindfolded in these highly unstable conditions. Many day traders have the habit of getting along with the crowd and doing whatever the rest does which is not always a healthy thing to do.
The market continues to be flooded with various issues that could impact gold prices and keep it in its current uncertain situation for the years to come. Traders need to gain a high-level understanding and perspective about the gold market condition by keeping up-to-date with the current trends and should always go with the guidance offered by reliable and reputed sources.
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The economic turbulences and political crisis that is being faced by some countries has a direct impact on the market and could create a potentially highly undependable state. Again this has affected the market on the reverse and traders have stopped selling and started to buy gold.
"With continued economic worries in Europe, problems in Syria, and some other factors, many of these traders that were shorting lost faith in the likelihood of gold prices to keep falling, so they covered their short positions by buying back the gold they shorted," says Dmitri Chavkerov.
Gold market may continue to face this sharp rise and fall in prices for the rest of the year, especially in the upcoming festival months in India, which is a largest consumer of gold. China, yet another high gold consuming region, spreads the strong feeling that it would be in huge gold demand for this year as well.
According to Dmitri Chavkerov, due to the increased physical fabrication demand from India and China, which usually happens during fall, due to the wedding seasons in both countries, and the overall nervousness of gold investors due to very rapid price declines earlier this year, gold prices could be indecisively range-bound over the next couple of months.
Chavkerov also warns the traders, especially day traders, to maintain a vigilant attitude and come up with a damage-controlling, well-designed plan that would prevent traders from losing money.
Before giving money to any forex money manager, many of whom trade gold, it may be a good idea for traders to check Forex Peace Army's managed forex reviews.
SOURCE Forex Peace Army