One of the most important commodity news analyzers and data interpreters that a gold forex trader has at his/her disposal are the charts and trends. Charts and trends are critical because of their ability to predict future prices by analyzing the situations and performances of the past. The minute analysis of a forex trading chart enables a gold forex trader to take into consideration any visible pattern regarding the price fluctuations of gold. There are mainly two kinds of analysis: fundamental and technical analysis, both of which are enumerated below.

What Is Fundamental Analysis

Fundamental analysis interprets the demand and supply situation prevailing at a specific point in time that affects the price of gold. Other factors such as exchange rates, political condition, inflation, drought, war, flood etc are also taken into account for fundamental analysis. Commodity news based on fundamental analysis aims to ascertain why there are fluctuations in the price of gold and whether the current prices are too high, too low or justified in the given circumstances based on the market forces.

Gold Charts Technical Analysis

Technical Analysis uses charts to analyze market data and interpret fluctuations in price. Technical analysis is a tool that is often used by the traders to interpret the movements of the commodity market based on price fluctuations over a period of time. Technical analysis helps predict the future behavior of prices of commodities.

Three Principal Charts

There are three principal charts that are used in the gold forex trading market: Line chart, Bar chart and Candlestick chart.

Commodity news based on Line chart depicts the price movement of gold rates or exchange rates of a pair of currencies with the help of a straight line. Bar charts, on the other hand, reflect the intra day performance of gold or pairs of currencies with the help of vertical bars. Each bar depicts four points marked by the letters OCHL to denote opening, closing, high and low as per the intra day time span under consideration. Candlestick charts are akin to bar charts. with the minor exception of the presence of a wick on both ends. When the opening value is more than the closing value, the candlestick is solid and when the situation is reversed, it is hollow.

Live 24 hour gold charts are a powerful tool that can be used by gold traders to spot and then take advantage of movements in the price of gold. After all, gold has long been considered a store of value in uncertain or troubled economic times – making it worth a trader’s time to compare the price of gold to other price or economic measurements.

How to Chart Gold

The price of gold can be charted in a number of different ways by a gold trader to try and predict future gold price movements. These ways may include the following:

Gold Verses the US Dollar. Gold traders tend to think of gold prices in US dollar terms and hence, they will tend to begin by chart gold prices in terms of US dollars. However, gold traders must remember that gold price movements may or may not be directly caused by movements in the value of the dollar.

Gold Verses Other Currencies. By charting the price of gold verses other currencies, a gold trader can also assess whether or not gold prices movements are being caused by dollar movements or whether the price of gold is moving in a more currency-independent way.

Gold Verses Oil Prices. A sizable percentage of oil revenue will tend to end up invested in gold. Hence and when oil prices rise, much of the increased oil revenue will be invested in either gold or hard assets. This can create more inflation and enhance the appeal of gold as an inflationary hedge .

Gold Verses Other Commodity Prices. As with the price of oil, the price of gold may also have some correlation with or relationship to the price of other commodities such as silver. Hence, a gold trader may want to consider charting the price of gold verses several other commodities find any potential correlation in price movements.

Gold Verses Inflation. Since gold is considered a hedge against inflation, there tends to be a correlation between the price of gold and inflation or expectations about inflation. Hence, a gold trader may want to chart the price of gold verses inflation.

Gold Verses Other Economic Indicators. Likewise and since gold is often hoarded in uncertain economic times or conditions, a gold trader may also want to chart gold against several other economic indicators such as interest rates or perhaps unemployment.

By looking at the price of gold chart verses other prices or economic measurements, a trader may be able to better predict and profit from future movements in the precious metal.