Thursday, July 23, 2015
Gold Price and Gold Trading in UAE
Gold is one of the most widely discussed metals due to its prominent role in both the investment
and consumer world. Gold was also used as the world reserve currency
up through most of the 20th century. Even though gold is no longer used as a primary form of currency in developed nations, it continues to have a strong impact on the value of those currencies. Moreover, there is a strong correlation between its value and the strength of currencies trading
on foreign exchanges.
The gold market
is subject to speculation and volatility as are other markets. Internationally gold price is noted in USD and gold tend to show a inverse relationship to USD.
So when the dollar gets strong, the gold price decreases and when the dollar gets weaker, then the gold price increases.
Although many new large scale gold mines became operational in recent years, the gold production is getting stagnant or low because of fast exploring of easy reserves. Now most of the gold are mined from very deep mines and the production cost is very high. Gold Production is relationship
upon the rate of gold.
Countries like India, China and US are main consumers of gold, mostly as jewelry. The festival seasons, economic growth and investment
preferences of these countries greatly affect gold price
. Gold is the most popular as an investment
. Investors generally buy gold as a way of diversifying risk, especially through the use of futures contracts and derivatives.
This blog is written for Orient Financial Brokers, an online gold trading broker offering online precious metals trading
for traders across middle-east.
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Thursday, July 2, 2015
How FOREX Trading Software Help us
OFBs (Orient Financial Brokers) Forex software is a powerful, user-friendly online trading system, setting new standards in online currency trading. Our award winning software allows you to trade all major global currencies, major crosses and precious metals, 24 hours a day. Major features of our system include:
Real Time Prices: Gives you 24 hour access to real-time tradable prices on thousands of global products.
Fast Execution: Provides fast and reliable access to even the most volatile markets.
Real Time Position Keeping: Helps you track your portfolio, allowing you to instantly see account equity, etc
Customizable Platform: Helps you create an unlimited number of screens, displaying all of the information you need to make those crucial trading decisions.
This information provided by Orient Financial Brokers (OFB), licensed and regulated by Central Bank of the UAE since 1997, to conduct brokerage in Foreign Exchange, Commodities and Money Markets. OFB has free demo trading platforms for a fixed period of time. With help of this, traders get familiar with the software and the market, and to test different trading strategies.
Timing is one of the major trading success determining factors, which is often forgotten by novice traders. Actually, according to market timing, the trading strategies can be broadly classified to day trading, swing trading and position trading.
FOREX (Foreign Exchange) is said to be the biggest traded market in the World. Statistics shows that above US $ 2,000 billion total traded volume is happened per day in this fastest growing financial market.
This blog is written for Orient Financial Brokers, a UAE based online forex trading and CFD Trading brokerage firm offering free demo trading and a range of account features
Friday, May 15, 2015
Currency - Commodity Price Relationship
Benefiting from Forex currency trading involving predicting the market movements and positioning oneself to profit from that movement. A trader should be aware of the basic currency market indicators and factors that contribute to both short-term and long-term market movements. One such thing trader should know is the relationship between some currencies to changing commodity prices.
Oil and Japanese Yen Relationship: Crude oil price changes and JPY shows a negative correlation because Japan imports almost all crude oil it needs. Thus theoretically CAD/JPY is one of the most sensitive currency pair with respect to crude oil prices.
The Oil and Canadian Dollar Relationship: Over the past decade CAD and crude oil price have shown a positive correlation exceeding 80%. Canada is the 7th largest producer of crude oil, has the second biggest oil serve in the world and is the most significant oil supplier to the United States. These factors contribute to greater co-relation between oil price and CAD. USD also shows high positive correlation to crude oil prices as USD is the currency used to determine crude oil price.
The Gold and Australian Dollar Relationship: Like oil CAD relationship, gold price and AUD shows a high positive correlation because Australia is the 3rd largest producer of gold. A similar correlation can be seen with gold and NZD, this is because the close relationship between NZD and AUD because of the geographical proximity which makes Australia the prominent destination for New Zealand exporters. Know more about Gold and Currency Relationships.
This blog is written for Oriental Financial Brokers, Dubai, UAE. OFB is the leading forex currency trading broker
offering advanced web-based trading platform and a range of account features.
Labels: aud trading, cad trading, canadian dollar trading, crude oil trading, currency trading, forex trading, gold price, gold trading, jpy trading, nzd trading, oil price, oil trading, usd trading
Tuesday, April 28, 2015
What You Need to Know About Short Selling
With every market drop you will hear lots of words like short selling, going short or shorting. And many times you can also hear the experts blame short-selling for the drop. This article is a brief description about shorting, ways for that and its effects on different markets.
The best explanation one can give to shorting is that it is opposite of going long. When you go long you buy a financial instrument, can be stock, futures, Forex currencies, EFTs, mutual funds, etc, hold it for a period then sell it. If the selling price is higher than that you bought, then you made a profit; and if it dropped against the buying price then you suffered a loss. Now going short is the opposite process; you first sell the instrument, wait for a time period and buy back the instrument. If the instrument price drops when you buy back then you profit and if it rises against selling price you loss. But there is a problem, how can you sell an instrument if you don't have it? The answer is short sellers first have to borrow the instrument from others, usually from a broker. This borrowing process can be costly as it usually includes a margin charged by the broker.
As said early, experts are not much favorable to short trading. Many markets and countries have strict regulations on short selling. Many believe that excess shorting can create a negative confidence in the market. The opinion is that when there are many traders hoping for a price drop then the overall market sentiment can drive the price down. And if there is a market crisis, then shorting can add to that crisis and can trigger an even bigger crisis. Regulators of US and most European markets have placed restrictions on naked short selling - selling without actually borrowing the stock within the set timeframe.
Shorting can cause vastly different impacts on contract markets. In trading of contracts like futures, options and currency pairs, usually you don't find any restrictions. In futures market short selling means your obligation to deliver a commodity at the expiration date of contract; and in options market it means your right not obligation to sell the underlying instrument at a fixed price. In currency trading, the scenario is a whole lot different. There you don't find any short selling restrictions of any kind. This is because there is actually no real shorting as in stock trading. In a long Forex trade you buy the first currency of a pair using second currency and in short Forex trade you just buy the second currency using first currency; in any way you are buying (going long).
Apart from just profiting from expected price drops, short selling is widely used as hedging and arbitrage tools. Some traders can use it as an 'against the box' tool to lock the profit they already made in a long-position, which they want to hold continue.
Tuesday, March 24, 2015
Gold and Currency Relationship
Gold is one of the most widely discussed metals due to its prominent role in both the investment and consumer world. Gold was also used as the world reserve currency up through most of the 20th century. Even though gold is no longer used as a primary form of currency in developed nations, it continues to have a strong impact on the value of those currencies. Moreover, there is a strong correlation between its value and the strength of currencies trading on foreign exchanges.
Financial markets price movement prediction is basis of successful trading. And Experienced traders know, that trading the currency market requires not only knowledge of the forex area. Currency price movement depends not only on macroeconomic developments and other economic news, but also from other financial instruments movement.Trader, knowing that the currency with which the market is concerned, can predict some of the forex market movements before they happen.
It is undeniably true that the price of gold is related to the value of the currency, so it is essential to understand how this association has come about and exactly how the currency influences the commodities markets if you are considering making an investment in gold. Understanding how the relationship between the currency and the price of gold works can help you to make the most advantageous investment decisions.
The traditional logic here is that during times of economic unrest, investors tend to dump the greenback in favor of gold.Unlike other assets, gold maintains its intrinsic value or rather, its natural shine.Investors generally buy gold as a way of diversifying risk. The gold market is subject to speculation as are other markets, especially through the use of futures contracts and derivatives. Gold price has shown a long term correlation with the price of crude oil. This suggests a reason why gold is sold off during economic weakness.
Gold prices are often used to measure the value of a local currency, but there are exceptions. Many people mistakenly use gold as a definitive proxy for valuing a country's currency. Although there is undoubtedly a relationship between gold prices and the value of a fiat currency, it is not always an inverse relationship as many people assume.
if there is high demand from an industry that requires gold for production, this will cause gold prices to rise. But this will say nothing about the local currency, which may very well be highly valued at the same time. Thus, while the price of gold can often be used as a reflection of the value of the U.S. dollar, conditions need to be analyzed to determine if an inverse relationship is indeed appropriate.