Good news for gold, and why oil traders should get worried

Published: 20 September, 2013 15:27

Throughout the centuries, items have been exchanged for other items or currency. Today, people can trade in either currencies or commodities. Commodities are things that are generally accepted to be of value, have consistent levels of quality, and are mass-produced across the world. These items vary from crops such as wheat to minerals such as gold.

The trading of these items is known as commodities trading. It happens on a platform known as the commodities exchange. This is a physical or online trading platform where people can invest in, and trade commodities. The online platform is always full of activity as millions of people around the world trade.

Due to the dynamic nature of online commodities exchange, it is important for traders to stay informed on relevant news around the clock. For gold traders, the tough times could be over. This week, the commodity has underperformed, with its value getting significantly low when measured according to the prices of oil. The price of a troy ounce of gold has dropped to between £788 and £806. This is far below its highest value price of £1178 per troy ounce of gold. However, analysts interviewed by Bloomberg are optimistic about the commodity.

Out of 26 analysts surveyed, 16 expect a rise in the price of gold next week. A half of the rest were bearish, and the other half neutral. The majority view of gold value is largely as a result of the jump that the commodity made on September 18th. The value of gold increased by 4.1 per cent, after enduring more than a month of low prices. For oil, the price per barrel dipped by $1.68 to settle at $106.39 on Wednesday this week at the New York Mercantile Exchange. This is largely attributed to the Fed’s announcement where it did forecast American economic growth from 2.3 % to 2.0 %.

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