Buy virtual paper or gold, what is it?

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The investment includes financial assets of various kinds. So many that they would pose a delicate decision problem among small and medium investors. One of these is one of the precious metals par excellence as in the case of gold. But it is convenient to differentiate between physical and virtual gold or on paper. It is exactly the latter that we are going to comment on to offer you another idea of where you can invest your savings from now on. But in this circumstance through a very special initiative, but above the original due to the proposals of the movements of this metal in the financial markets.

Pues el papel u oro virtual es el que no tienes físicamente pero que lo adquieres mediante contratistas. Fundamentalmente mediante derivados y que se materializan mediante múltiples instrumentos financieros. Algunos con los que está familiarizado y otros pueden ser la primera vez que escuche de su existencia. Pero be cual sea el caso, es factible que los necesite en alguna vez de su vida para rentabilizar el saldo de su cuenta corriente. Fundamentalmente cuando el estado de los mercados financieros no es el más favorable. With decreases in its price or worse still, like a change in trend, going from bullish to bearish in a few days.

So that you are totally willing to invest your savings in a product as characteristic as this, nothing better than knowing what they are and how they can open positions. As we might expect, you now have a powerful new instrument for taking positions in a precious metal as rare as yellow. To this end, you cannot forget that gold has appreciated during this year in something more than 40%. Above other financial assets of special importance, and among which the main indices of the international stock market are included. Where it has barely exceeded 15% levels at best.

Relevance of gold

It will be very important for you to understand them better, it is important that you know that in the early 80s an ounce of gold was paid at 850 dollars. The price plummeted for the next two decades until 1999. at levels of $ 250 per ounce and this has conditioned mining companies when making new perspectives. From a supply point of view, in 2004 production decreased by 4%, the largest decrease in the last 65 years. This justifies that expectations for 2010 foresee that gold production will be reduced by 30% and will be a factor of pressure on prices. It is essential to know that it consists of a very inelastic supply. It takes 4 to 7 years to extract gold once a mine has been geographically located.

One of the traditional factors that have caused the sharp falls in the price of gold have been the Central Banks. The reason for this behavior is explained by the high interest rates with which they lived. Since the possession of gold in itself does not generate any type of retribution, the Central Banks during the time of restrictive monetary policy what they did was to commercialize or lend gold in exchange for debt of other countries. The high interest rates they made the possibility cost of having gold in the reserves excessive and, in this way, the banks were inclined to increase the supply and flood the market with gold.

Risk factor's

Although the jewelry sector maintains a representative weight, it appears to be structurally in decline. Manufacturing fell dramatically from 1997 to 2002, even as it has recovered in recent years. What is the reason for this latest rally? How likely is it to be consistent? To answer the question, it is essential to understand that during the years 1997 to 2003 the claimants of gold for recreational use were first world countries. The some saturation together with the bursting of the technology bubble and the fragility of their economies, they inhibited demand.

In 2003, the trend changed because porcelain, and to a lesser extent India, begin to export en masse. These currencies create a wealth effect that triggers consumption in these traditional areas. Speaking of traditions, a curious example is found in the religious sphere. The Golden Buddhas are made by means of gold leaves that the faithful deposit to cover the Buddha and that they must replace annually.

Gold-oriented mining companies

Regardless, it will be very necessary for you to know that gold-focused mining companies fall under two criteria. On the one hand, because of its size, and where logically the greatest risk are the little ones. While on the other hand, it also occurs between producers and exploiters. Exploiters run the risk of searching and digging. The others, by contrast, focus on treatment and distribution.

It is also very relevant that you have any idea about where to contract this important financial asset worldwide. Well, so that you do not have any doubts, it will be very relevant that you know the main market where gold, silver and other non-precious metals are traded (such as Aluminum, Copper, Lead, Nickel, Zinc or Tin) is COMEX. The exception is Platinum since the main market is TOCOM (yen) and NYMEX. In any of them you can operate. But under much more demanding commissions in the market than by buying and selling shares.

Provide a greater financial culture

At the same time, you cannot forget at any point that you will need greater financial knowledge to trade the yellow metal. Whichever mode you select from now on. From this general perspective, the gold market is tremendously influenced by the flows generated in the futures markets. While the the correlation for crude oil is 40% On the subject of gold, the price can be clarified on an 80% and a 90%. This is a piece of information that you should pay attention to if your intention is to take positions in the coming days. With all certainty that it will generate a great advantage in the operations that you are going to carry out from now on.

On the other hand, gold generates a strong volatility in the conformation of their prices. From this point of view, it may not surprise you that the difference between your high and low prices in a single trading session can exceed 20% levels. A more unviable factor in other financial assets. Fundamentally when it consists of equity markets, even in the sessions with the greatest price fluctuations.

Well, this data will be especially relevant at the precise moment in which you are going to open positions in this precious metal. Even above other technical or even fundamental considerations. Because it cannot be forgotten that investing in gold is one of the characteristics of all and not all users know how to operate with such an initiative. Whatever the case, gold is one of the investments that are in fashion due to its current evolution in the markets.

Virtual gold contributions

Anyway, this type of investment involves a series of characteristics that you should pay attention to if you are going to take positions. Not surprisingly, it is a very innovative option and to a certain extent novel that may generate the odd surprise from now on. And among which the following stand out:

• At no time will you have a fixed and guaranteed return. On the other hand, It will depend on how the financial markets evolve.. For this purpose, it is the closest thing to buying and trading stocks on the stock market.
• It is a special investment that requires a greater knowledge by the financial markets. And more particularly the one related to the yellow metal. So you can adjust the ticket to the most recommended prices.
• These operations do not have nothing to do with physical gold dado que parten de concepciones totalmente distintas. Y con una strategy de inversión que decididamente no disponen nada que ver entre sí. Hasta el punto de oponerse totalmente desde su origen.
• You will never have physical positions on this precious metal. Rather, you will base your investment on your growth prospects. As an example in futures or derivatives contracts. With high potential for revaluation. Even when taking many more risks than before.
• A good part of the proposals can be materialized in products such as investment funds, ETFs, or even the most aggressive models that include this very special financial asset.
• Paper or virtual gold it is not intended for all investor profiles. But only to all those who have extensive experience in this type of operation. Which are decidedly not virtual in conception.