Gold, like other precious and scarce resources. has intrinsic value, meaning that there will always be somebody who wants to buy it, though not necessarily at the price you desire. Whilst physical gold can at times be difficult to sell, gold ETFs are easier to negotiate for the majority of investors. Although trading currencies on the Forex market is a little bit different to trading gold, currency also has intrinsic value. Through the Forex marketplace, it is even easier to trade than gold.
Access to market
One distinct advantage enjoyed by currency traders is access to a trading marketplace that is available 24 hours a day, 5 days a week. Forex traders can log in at 2 o’clock in the morning and initiate a swap, and they can take advantage of after-hours news stories and foreign market activities to make immediate adjustments to their investment portfolio.
One key benefit afforded by Forex trading is the ability to invest using high levels of leverage. Whilst this is something that should be approached with a certain degree of caution, leverage can allow a new or seasoned investor to make significant trades without a large upfront investment. While this is a good thing for many traders, it is important to keep in mind that even small fluctuations in currency valuation can cause serious movements within an individual’s portfolio. You simply will not see this type of leverage potential available with gold investing.
Many investment professionals think of gold as a stable and reliable investment vehicle. Whilst gold is certainly a standard-bearer when it comes to risk mitigation and consistent, albeit modest, returns on an investment, trading in the Forex marketplace provides a level of control that acts as a natural hedge against risk.
Most online trading platforms require the trader to establish a margin call figure that will prevent a potential loss from wiping out the funds in a related investment account. This, coupled with the quick reaction times that are the hallmark of Forex trading, creates a controlled environment that naturally manages risk.