Gold and other base metals saw their prices hit ten month lows around the globe on the back of sustained selling by investors and hedge funds in December 2016. The selling pressure was partly driven by the perception that the US Federal Reserve would hike interest rates in the coming weeks. Traders are expecting the Fed to hike interest rates at least twice in 2017. This would make government security yields more attractive leading to investor money flowing back from emerging markets to US backed treasuries.
Reports coming in from wealth managers indicate that most have cut their long positions on Gold just before the holiday season and this could have played a role in precipitating the fall in prices. Other precious metals like silver and platinum have also witnessed a sharp drop indicating that there is more downside left in these commodities. Base metals like Copper which has been the worst performing metal commodity over the last two years is expected to recover later this year. Demand for Copper has risen globally by 3% which is expected to provide strong support in case prices begin to dip again.
After the drop in 2016, Gold has since recovered to hit a three-week high in 2017 driven by demand from speculators and renewed interest from investors. Analysts have forecast that Gold which delivered a return of 9% in 2016, could deliver returns in excess of 30% in 2017. The accompanying volatility has emerged as a excellent opportunity for traders.
With Donald Trump as POTUS, 2017 promises to be one of the most interesting years of the decade. His policies are expected to spur economic growth in the United States which has for long been the engine driving growth around the world. Given his penchant for shock pronouncements and unconventional thinking, the trading world is gearing up to face economic shocks generated by his administrations policies.
How to Profit From This Volatility
You can do precious metals trading online with as little as US$100 in investment. You can get leverages that can be as high as 200:1 which means with US$100 you could take exposure of up to US$ 200,000 value in your portfolio. Many full time workers have quit their jobs to earn money online through metal trading over the last few years. Some of them have even gone on to become millionaires.
Trading is an art as well as science. One of the keys to becoming a successful trader is control over your emotions. Emotional discipline can make or break a traders career. The biggest reason that traders go bust in this industry is because they refuse to cut their losses early because of emotional reasons. Taking a hit in your books causes emotional distress and most new traders avoid this behavior.
Nobody could have summed these volatile times better than George Soros, who once quipped;
“ Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.”
Tell us what will be your trading strategies for 2017 in the comments section below.