Gold Trading Volumes Continue to Rise
The total value of all transactions conducted in the market over a specific period indicates market power is known as volume. The gold volume in the gold futures market refers to the number of contracts exchanged in a certain period. The more volume there is, the stronger the market becomes.
When the price goes with the trend, the volume increases, and when the price moves against the trend, volume declines. When purchasers are eager to acquire shares despite higher prices, the volume growth is enhanced. Low volume indicates that purchasers don’t believe the trend will last much longer during an uptrend.
Trend analysis based on price alone doesn’t provide a complete view of the market; however, complementing it with volume analysis can provide a much more accurate picture of genuine supply and demand in the market and identify the strength or weakness of a trend. Take a look at the increasing rate of gold trading volumes:
Increasing gold trading volume
The trading volume of bitcoin in 2021 indicates the asset’s position in comparison to gold trading during the current surge.
According to Finbold’s calculations, bitcoin’s average daily trading volume between January and March in 2021 was around seventy billion US dollars. For 2021, this value represents thirty-nine percent of gold’s one seventy-nine billion US dollars average daily trading volume. Over-the-counter trades and ETFs are included in Gold.org’s average daily trading volume data which indicates that the price of gold will only increase in the coming year.
This Friday, bullion had its best week since May; it has risen eight percent since its last low in September and is currently just two percent away from breaking records for the year.
According to iShares, jewelry contributes fifty percent of world gold demand, followed by central bank reserves at twenty-five percent, individuals at fifteen percent, and industrial uses at ten percent.
With festival and wedding season underway in India, the Chinese New Year, and Christmas in the West, the next six months are likely to see the highest demand in gold, increasing the gold trading volume.
Gold Has Maintained Its Value
Gold is considered the most precious metal in the precious metal family. Its rarity, combined with its demand, makes it an excellent investment.
As consumers continue to purchase gold, one thing remains its value. Gold’s purchasing power has been constant and is not related to current prices.
This retainment in value is an excellent foundation for investment. After all, the goal is to invest in something you know won’t make a loss even if you don’t make a profit at the end of the day.
If you’re looking into building your investment portfolio, consider looking into the gold market. Many economists state that gold is an excellent choice for investment purposes. Although it does not provide security against inflation, it’s a great way to diversify your assets.
The number of ounces of gold you hold will fluctuate with prices; for example, if you want a certain percentage of your portfolio in gold, say 10%, you need to be smart and sell gold when the prices go up to buy when it falls.
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