How the Gold Price Affects Your Online Forex Trading Strategy

Commodity prices are important in online forex trading, due to correlated currency pairs. Gold price for example directly impacts all Australian dollar crosses.

Gold and Online Forex Trading

Gold impacts all Australian dollar crosses, and traders have to watch major trends in gold price. Minor movements in the price of gold may not have an impact at all. But major movements certainly will. Online forex trading in such cases becomes easier through the clarity that gold price provides. Entire forex strategies are based on commodity analysis, and gold is a very popular commodity. Traders are able to avoid much of the market noise and risk. Simply by looking at a commodity’s finite supply and minimum demand. After all, the suppliers of that commodity cannot just print more of it, as is the case with non physical assets. Online forex trading of AUDUSD and more pairs, relating to the Australian dollar are a very good choice. When gold sets a solid trend, then AUDUSD will generally move in the same direction. Because Australia is a very big gold exporter. Moreover, gold is unique, irreplaceable, and has many industrial uses. It is in fact more unique than even crude oil. Because gold cannot be made synthetically, whereas crude oil can be made through various artificial methods. The price trends of gold therefore carry a lot of weight, and can provide very solid medium term trades.

Online Forex Trading of AUDUSD for Best Results

AUDUSD is an ideal pair for gold traders and analysts. Since it trades almost like gold itself, and it is easy to figure out the impact of the US dollar. As well as minor day to day moves, which may not constitute a solid market move. In general, the same methods can be used on crude oil and other commodities. But in the long run gold is unlikely to be replaced by anything else, as it is a unique commodity. Online forex trading can be further enhanced by looking at market risk, and how traders see precious metals at any particular time. Gold however is not immune from excessive demand and parabolic rallies. Which always eventually result in steep downward corrections. These trends are longer term and much more difficult to predict. In a nutshell, traders should stop buying gold when the trend seems to have gone parabolic. That is a chart steeper than 45 degrees.

The Wise Commodity Forex Trader

Wise commodity currency traders establish extreme lows and highs for the price of the commodity, gold in this case. And then trade the related currencies accordingly. So turning points in AUDUSD may not be easy to spot on its charts, but fundamental analysis in gold, can tell you much more. And as always, fundamentals prevail over technicals. This is the best forex trading strategy as far as AUDUSD is concerned. Because the defined supply and demand in gold help remove a lot of market risk. Traders can also learn forex basics and extend the concept to silver, and other unique commodities. Generally, all precious metals move together with gold, in the same direction. Just be ready and willing to fade technical signals on currency charts, in favor of the fundamental signals in these commodities.