The Gold puzzle

How it began ...


It was the end of July, on that day it was raining heavily, we could almost hear the storm that was wrecking havoc outside. " Safe Haven " The first two words we heard about gold. After a deadly wait of hours our first instructor came inside and started his lecture with these two words. 

He said, " Gold is called the 'Safe Haven' does anyone know why ?". All of us who were quite new to the concept nodded our head in a clear state of confusion. Little we knew that this one scarce metal will make the next months of our life a living hell. Well not entirely, as technically 90% of my job revolves around it, so it does earn me my bread, but it has proven that a single point movement of its price will decide the tone of my mood for that day. 

For those who don't have a good idea , Gold is called Safe Haven because it will always beat the inflation, that means doesn't, matter how much prices of goods rice, Gold will always get you the equal or more proportion than the time when you bought it. 

40-50 PIPS (4-5 Points) of movement is enough on either side to make a client stay or leave. Well based on what I am gonna say later you will know for yourself how the existence of this virtual currency can shape the way you think about investing your money.

CFD or as we can say, Contract for difference, is the method we use to make profit on the purchase or the sale we have made over the quantity of Gold we have booked for ourselves. 

So basically imagine tomorrow a mine is going to un-root a certain quantity of gold, this trading allows you to purchase or sell that currently non existing commodity. This is called 'Future Trading' or 'Trading in Futures'. Now when instead of making money directly from the price of this virtual gold, you make money from the difference there is in the prices when you bought/sold it. Instead of purchasing the whole quantity of this gold you can purchase a part and then earn profit over the difference there is currently in the prices.

Well that's it for today if you like what you read. Reach out and let me know, it will surely give me more motivation.

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