Gold soars to two-week highs following weaker-than-expected US GDP
While the US GDP rose to pre-pandemic levels as a result of the generous economic stimulus packages, it still fell short of analysts’ expectations, thereby spurring another gold rally.
Gold prices have been trending upwards recently thanks to the dovish policy of the FOMC, which decided to keep interest rates unchanged on Wednesday, while Thursday’s weaker-than-expected US GDP gave another boost for gold bulls.
As the US dollar suffers from the aftermath of the FOMC meeting and the weak GDP data, XAU/USD traders have managed to stage another rally.
XAU/USD is currently trading near $1,830, the latest resistance level from which it bounced off two weeks ago. If momentum picks up and prices manage to pierce this zone, we could see an extended breakout towards $1,850 and beyond.
How to trade gold online
Aspiring traders and investors can easily start trading gold as well as several other valuable commodities online through financial derivatives which track the price of gold on the financial markets.
Speculating on the price of gold with Contracts for Difference (CFDs) allows clients to achieve substantial returns regardless of the market’s direction or the amount invested.
In addition, CMTrading clients can also benefit from the powerful leverage offered across a variety of assets and enjoy much higher returns than their initial investment would allow.
For example, opening a BUY position of 1 lot in gold (XAU/USD) at the price of 1,827, which was the average going rate on the 30th of July, 2021, and closing the trade at 1,840 – a 13 pip difference – we would gain near $1,157.
Obviously, if the price of gold didn’t move to the upside, or if we failed to close the position during the runup above our entry point – this trade could have turned into a loss.
Therefore, in order to manage risk effectively in the long run, it is always important to develop a risk management strategy and make use of the stop-loss orders available on the trading platform every time you open a position.
That being said, CFDs also allow traders to profit even if the prices are moving downward as well. Using the same example as above, if the price of gold moved in the opposite direction and dropped from 1,827 to 1,810, traders with SELL positions would enjoy returns upwards of $1,500.
Discover more opportunities with CMTrading
CMTrading offers more than 150 tradable assets including the most popular commodities available in the markets. CMTrading clients get access to the global oil markets, exceptional trading conditions and robust safety and security under the auspices of the Financial Sector Conduct Authority (FSCA) in South Africa.
Being a retail brokerage that specializes in CFDs (Contracts for Difference), CMTrading provides clients with unique advantages such as 100:1 leverage on gold, which allows traders with smaller accounts to gain exposure to much larger positions. This translates to substantially higher profit potential, however, it should be noted that leverage also increases your exposure to downside risk.
On the other hand, while leverage typically adds a certain degree of risk to any investment, CMTrading also offers negative balance protection, thereby guaranteeing that potential losses will never exceed your invested capital.
If you are interested in learning more about how you can take advantage of price movements in the best-performing commodities or seek to gain from fluctuations in the exchange rate of currency pairs, you will find that CMTrading’s unique offering of innovative services and diverse account types are suitable for both beginner and experienced traders.
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