Cash, stocks and bonds are the asset classes that form the bulk of investors’ portfolios. Nonetheless, success has also been attributed in the diversification through investment in other types of assets. Gold and natural gas have recently caused a stir with dramatic changes in the latest commodity trading prices.
Gold is a very lucrative market to trade in. The asset has a reputation of remaining steadfast in the face of adverse macroeconomic and microeconomic trends. Due to its resilience, gold has outperformed other types of investment assets on numerous occasions. The supply and demand dynamics of gold have changed dramatically over time. Cutting edge mining technology has improved the availability of gold in the market by minimizing mining costs and simplifying the extraction of the mineral form the earth. Moreover, population growth has greatly increased the demand for the mineral while new industrial uses have broadened the market. If you are looking for investing in gold, now is the time.
Gold investments exist in various forms. One can investment assets gold bullion directly, buy shares in companies involved in gold, have changed through buying shares of exchange traded funds. Moreover, an investor may invest in gold futures contracts that trade on specialized exchanges and give buyers the right to have a certain amount of gold delivered to them for an agreed-upon price at a specific date in the future. Each alternative has its advantages and disadvantages with accompanying rewards and risks.
Following the wobble in Wall Street in late October, gold saw its biggest one day move in over two years breaking out to $1226 per ounce. This came after the worst stretch in 8 months for the US stock market. Gold is now the safe haven in the highly volatile stock market and its prospective shifts look promising.Week to week gold is still tending to move within a $25 range. Gold stands at $1,210.48 0.75 (0.06%), certainly within the $25 range following its peak at $1233.47 on 24th October. The volatility is as a result of the outcomes in the US midterm elections. Currently, the $1200 underneath is a strong support point for the gold prices.
Weather is a predominant factor when it comes to natural gas price shifts. As the extremely cold of early winter season draw in closer, the natural gas futures finished sharply higher in the week of November 9th. The United States Natural Gas inventory rose 69 billion cubic feet slightly more than the expected rise of 66 billion. However, the price broke out after generating a bull flag pattern. Despite the larger than expected rise in natural gas inventory reported by the US Energy Information Administration, the prices were unaffected. Weather has been the main driving factor with temperatures expected to drop even more in the next 10 days until the end of November. Heating demand is expected to rise substantially. Traders have also taken a more prospective approach to natural gas with their eyes fixed on future demands.
Production of Natural gas has improved with the increase in fracking. Fortunately, the higher natural gas demand has matched the fracking boom. However, pipeline capacities have been overwhelmed and more rigs are coming down weekly. Moreover, the United States sanctions on Iran are also having spill over effect on the market factors. The burden of the sanctions is being felt in countries like Iraq and China. Recently, a US liquefied gas tanker headed for China changed its course and this has been attributed to trade tensions. Although the rise in oil prices following the sanction on Iran is a strong factor to consider, traders are keen to see if such occurrences will become regular. Currently, natural gas stands at $3.78 level