How to Analyze the Gold Market
Investment professionals generally advise their clients to diversify their holdings among stocks, bonds and fixed-income assets, but precious metals such as gold, silver and platinum have become popular additions to the mix in recent years. Gold has long been used as a hedge against inflation and economic uncertainty, but investors need to analyze the many complex factors that can affect the price of gold before considering this commodity, and not get caught up in any frenetic trend of buying or selling.
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Instructions
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Read financially focused newspapers, magazines and other publications, as well as financial websites. Many will provide daily quotes of the closing price for an ounce of gold. Financial websites allow you to track the price of gold and related industries throughout the trading day.
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Use a spreadsheet to track the daily price of gold. Create a column for each trading day, and add the closing price of gold for the corresponding session. Use spreadsheet graphing features to track the price of gold in correlation to various factors.
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Watch for trends. Over time, you may notice patterns in the way gold prices react to world events. For instance, the price of gold tends to rise when major currencies such as the U.S. dollar and the European euro are experiencing periods of weakness. Gold also tends to rise on fears of inflation and global instability.
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