ATFX gold futures analysis: On Tuesday, gold futures prices rose to above $ 1,700 for the first time since 2012, but encountered resistance above 1740 and eventually fell back. The overall fluctuation of gold on the day reached nearly $ 70. This shows that investors' preference for gold remains unabated.
But on the other hand, the improvement in global risk sentiment limits the room for gold prices to rise. But the overall upward trend of gold has not changed, and the current gold futures price is only less than 10% away from the historical high set in 2011.
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Looking back at the spot gold market, although there was a large increase in intraday trading on Tuesday, it only reached the top of $ 1673. It can be seen that the price difference between gold spot and futures is obvious.
Although the price of futures gold itself will be higher than that of spot gold, the spread between the two has expanded since March, mainly because of the shortage of physical gold for delivery. Even though the US debt, U.S. stocks, crude oil, and gold all fell in the market in mid-March, the demand for U.S. gold spot was still increasing sharply.
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Generally speaking, panic will increase investors' pursuit of spot gold, and the supply of spot gold is hindered by the spread of the global epidemic. After being closed for two weeks, the three most important gold refineries in the world have just recommenced operations this week. The gold market may be subject to uneven supply and demand, and there will be large fluctuations at any time.
When the price of gold rises and falls sharply, and the investor's trading demand soars, spot gold investment is prone to liquidity problems, and this complexity will exacerbate the decoupling of spot gold and gold futures. We all know that the lack of liquidity will lead to extremely high spreads in the market gold trading, severe slippage and even trading interruptions that may increase investment risk.
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Investors should understand that high spreads will directly erode investor profits and reduce the proportion of open positions. High spreads will reduce the profitability of traders, while the number of open positions and the proportion of positions will be weakened. If you choose gold futures contract trading, compared with spot gold trading, you can save a higher spread, but also enhance the flexibility and flexibility of trading and holding positions.
In addition, slippage is something that investors are reluctant to see. When slippage refers to when an investor clears a position or places an order, the system indicates that the price and the previous quotation have changed, which means that you can only be forced to accept the price that was not in your plan For a deal, even if it is only a slippage of $ 0.1 / oz, the first-hand transaction has already lost $ 10.
If you happen to be a short-term trader, and intra-day trading is very frequent, then the loss caused by slippage is undoubtedly greater. Since futures gold trading is more liquid than spot gold trading, slippage can be avoided as much as possible, and investors can trade with greater peace of mind.
Under this background, seeking futures gold trading products other than spot gold has become the best choice for many investors. ATFX officially launched the gold futures contract products on March 30. It can be said that the timing is very appropriate, which conforms to market trends and enriches investors' trading options.
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In the current situation of high volatility and liquidity may be urgent at any time, gold futures give investors greater investment flexibility, because futures gold is more liquid, investors are avoiding the liquidity tension risk mentioned above There is also an option. With excellent liquidity support, investors can follow their own investment plans, even if they carry out larger-scale trading operations, they do not have to worry about the problem of being unable to trade.
It must be mentioned here that one of the biggest advantages of ATFX gold futures lies in its extremely competitive spread, which is as low as 0.45, which is significantly lower than the spot gold trading spread. If the spread is low, the position that can be traded with the same funds is larger, so the position is increased.
The room to withstand price fluctuations will also rise, because the spread of 0.45 US dollars, one lot is 45 US dollars, then even if the spread is expanded to 1 US dollar, then it will need to pay 100 US dollars, of which there is still 55 US dollars of room. The spread on most other platforms is more than 0.5. Trading first-hand gold on ATFX is equivalent to saving $ 5. So why choose the ATFX trading platform and products, the spread advantage has always occupied a very important factor.
And compared with other investment tools, the futures market has always been considered a shorter-term investment transaction form, because of its greater intra-day volatility, investors can profit from price fluctuations in a short period of time.
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In ATFX, trading gold futures in the form of CFDs, investors can establish long and short positions according to their expectations. Under the T + 0 mode, they can close positions at any time and profit. As long as the direction is correct, then fluctuations may bring Profitability gives market participants great flexibility to grasp this rare investment market. After all, under the current market environment, short-term opportunities appear more frequently, and it is particularly important to discover and seize trading opportunities in a timely manner.
The above analysis was provided by Lin Mingtian, chief analyst of ATFX Asia Pacific.
(The above analysis only represents personal views. Foreign exchange markets are risky and investments need to be cautious. ATFX will not be responsible for any profit or loss that may result from direct or indirect use or reliance on this information.)