In the current economic scenario, gold has turned out to be the relatively stable investment model compared to most others. Of course prices here are constantly on the move, however, there are ways in which to ascertain the movement of gold prices. Determining and understanding how the gold market works will help you in predicting which way the market is going. This will help you make the right investment choices.
There are several ways in which you can make an educated guess on which way the prices of gold is headed. One way is to look at the historical prices of gold. Any mutual funds dealer worth his salt will tell you that there is never a guarantee on prices based past performances. You will have to gather knowledge and make an informed guess. When you are making a study of gold price history, you will need the historical price charts, an online charting service as well as a working knowledge of price trends.
There are several services online where you will be able to find this information.
Once you have all historical data together, you will need to analyze quite a few things. Don’t be overwhelmed by it. It just needs some getting used to and then you will develop a sense for it. Things you have to look into are the trends of ADX strength as well as the DMI. You will also have to look at the MACD divergence, the support and resistance levels that have been in play and an average of 200 day movement.
Then there is the technical analysis part which means studying price as well as volume gold futures contracts. All of this information will be able to tell you what is happening in the gold market currently. But if you want to understand why this is happening, then you have to be aware of current events as well. Look into the economies of countries that are political unsettled or affected by war. Such economies are pretty rocky. Look for increase in commodity trading as well as any central banks that may be working on increasing their stockpiles.
These are just some of the reasons that determine which way the gold prices go. Whenever the economy of a country takes a hit, it affects gold markets worldwide and there is a resultant change in prices. What you have to understand that particularly with gold, prices are related to emotions as well. Only in good times will people buy. When you are able to understand rising consumer confidence index and interest rates, you know you are on the right track.
There is no sure shot way of making a prediction, however, analyzing these factors will help.