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Futures trading: gold or crude oil?

Gold and crude oil are by far the most popular futures indexes (that aren’t dependent on the national sector) traded on the market.

Used as a medium of exchange for over 2,000 years, gold is still considered a valuable asset and perhaps the world’s most traded commodity. At the same time, Crude oil never stopped being the cause of many wars.

Gold and crude oil futures provide a convenient and cost-effective way to participate in this secure market.

What impacts the Gold futures chart?

Widely regarded as safe-haven assets around the world, gold futures are critical to portfolio diversification. However, a number of factors can influence the price of gold.

By having a good understanding of market volatility and dynamics, traders can be better prepared to take advantage of potential opportunities in the gold futures markets.

So what can help me make my own gold futures forecast? Apart from tools like letizo.com, where you can track any market data, you should also check the following news:

  • World events, including elections and financial crises, can create financial uncertainty that could affect the price of gold.
  • Federal Open Market Committee (FOMC). The meetings, held 8 times a year, are when key interest rates and US monetary policy are announced. The gold market tends to rise when interest rates fall and decline when rates rise.
  • The US dollar index is a weighted average of the value of the dollar against foreign currencies. Generally, as the US dollar appreciates against other currencies, the price of gold in US dollars tends to fall.
  • The Producer Price Index (PPI), published alone once a month, evaluates prices at the wholesale level and may indicate trends in commodity markets.
  • Many more.

What if I trade crude oil?

The day trading crude oil futures should also be well thought out.

The oil futures exchange market reflects the economic situation with oil supply and demand only in relation to the general dynamics over a fairly long period of time.

For example, the decline in oil prices in the second half of 2019 – early 2020 was due to:

  • shale oil production;
  • development of alternative energy;
  • slowdown in the growth of the Chinese economy;
  • abnormally warm winters.

So, objectively, supply outpaced demand. All this greatly decreased the crude oil future prices back then.

Therefore, our recommendation would be to do thorough research prior to approaching any index.