Historical gold prices
Below is a chart showing the fluctuations of the gold price in the past five decades. All in all, there has been a drastic increase in the price of gold since 1970. During this entire period, the least return on investment to investors who had tied their money to gold was between 1970 – 1979. The biggest rise, on the other hand, was experienced between 2000 – 2009.
Gold price volatility 1970 - 2017
Example of gold trading
Let’s see how trading gold works in practice. You do your research and you think that the price of gold will appreciate. For that reason, you buy 1 lot (100 oz) of XAU/USD at the price of 1,184.60. One lot equals $100 for every $1 movement in the price of gold.
The interest in gold spikes up and a couple of days later the price trades at $1,189.70. You decide to sell and lock your winnings. Your profit is calculated as follows: (1,189.70 – 1,184.60) x $100 = $510.
The price of gold does not move your way and the day after the price trades at $1,180.30 . You decide to close the position and cut your losses. The loss in this case is: (1,184.60 - 1,180.30) x $100 = $430
Although gold is the most popularly traded precious metal, traders who see the value in diversifying their trading with gold, they often explore other metal markets too, such a silver.