Why gold is a popular binary options trading asset

Gold prices have been pogoing up the charts

Gold is, in general, quite volatile. For this reason, it can make for a great choice with trading gold binary options. With its volatility, gold tends to fluctuate a great deal in price in a short amount of time. This, of course, is exactly what you want to see when you are trading binary options. The more that the prices fluctuate and the higher or lower they go, the more likely you'll be to make correct choices for the investment in binary options. This means that, assuming you are correct in your prediction, you can make great gains on the money that you invest. For this reason, when you trade binary options, trading gold is certainly a choice that many people make. It's worth looking into the gold binary options choices and seeing if they are right for your needs.

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Oil Barrel Binary Options Trades

There are many things that can make the stock market go up or go down. Stocks fluctuate in price all the time and it's important to understand these fluctuations before you get into the market. It's possible that the moral of the country is down because of high unemployment or because of a political problem that is going on. It's possible that the prices go up if a large business makes a declaration or if something else happens on the world economic stage. One type of investment that is based on these changes is binary options. Here, the investor is following a certain asset such as a stock and predicting what will happen with that asset in a set time frame. They are saying that the asset will go up in price a certain amount, or that it will go up within a certain range. Or, they might be saying the opposite.

When will gold pop already?

The higher gold climbs the more intense the debate between bulls and bears, those who think the yellow metal has a long way to run and those who say this is a giant bubble that is going to pop, and soon.Here are five reasons the bears are calling the current run of gold -- up 27 percent since Jan. 1 -- a bubble, and thus something to avoid.

1. Basic economics. The World Gold Council in a recent study said that in the second quarter total global demand for gold declined 17 percent, on a year-over-year basis. But despite that decline the price of gold rose about 25 percent. At some point supply and demand have to come back into balance, say the bears, and when they do it would be best to be out of gold.

2. If it looks like a bubble ... "People believe that gold is a hedge against uncertain times. In the long run, gold prices have kept pace with inflation. People are flocking to it", says Lloyd Thomas, an economics professor at Kansas State University. "But in 2000 the price of gold was $300 an ounce. It has gone up six-fold since then, and it might go up higher than what it is right now. It's gone up too fast -- it's a bubble." 

Thomas compares the current gold market to the U.S. housing market. People believed, as they believe now for gold, that the housing prices would continue to increase. But ultimately, they fell more than 30 percent in most 
American cities.


"The same thing could happen to gold; it's not risk-free. In the last 10 years it's gone up 17 percent a year, but the price of things we purchase has only gone up 3 percent a year. That's unsustainable. It's my own opinion that gold prices will collapse -- I just don't know when", he says.

3. Soros has left the building. Billionaire George Soros as well as Eric Mindich cut their holdings in the SPDR Gold Trust, an exchange-traded fund, in the second quarter as prices rallied. You may not understand algorithms, econometrics or 200-day moving averages, but almost anyone can imitate winners.
Major professional money managers are also starting to get worried. Wells Fargo is warning its clients, including wealthy ones, that gold is grossly overbought, a "bubble that is poised to burst." Said Wells Fargo analyst Dean Junkans: "We have seen the economic damage" of past bubbles and "feel compelled to ring the warning bells."
"There could be substantial risk to gold once the fear that the world is coming to an end subsides," Junkans told Reuters in a telephone interview from Minneapolis. "We are worried about the downward risk."

4. Investor naivete. "Trees don't grow till heaven. I think buyers need to be beware we are in a 'caveat emptor' market," Jeffrey Rhodes, global head of precious metals at INTL FCStone, a brokerage, told Reuters.
"My problem is that people are buying gold and they don't understand why they are buying gold and that's a big problem and that is a classic symptom of a bubble," said Rhodes.

5. What is your pain tolerance? Even if you don't think gold is a bubble, it certainly is a bull market, and bull markets often end dirty and messy, and take years to recover from. Think the U.S. real estate collapse and all the attendant carnage that erupted in 2008 and still hasn't been repaired, among homeowners or bankers. The same could be said of property markets in Ireland and Great Britain.




Want to hedge against the Gold Standard? Try trading binary options.  


Thanks to the source for the article on Gold Ready To Pop