The decline of gold mining stocks has finally neared its end. Following a simple law of syllogism, we can see that gold mines are about to come back into prominence as a growth stock. First, look at what’s happening with central banks all over the world. They are struggling to help economies stabilize, and this goes for pretty much every major country. The U.S. Federal Reserve, the European Central Bank, the Bank of England, and the Bank of Japan are all in flux right now, trying to adjust interest rates to help their specific economies find some traction and help growth resume. This has led to a lack of stability in both currencies and in sovereign bonds. When this occurs, long term investors with a focus on staying active find a place to compensate for the lack of profits, and gold is the typical go to choice. When the price of gold goes up, gold mines see higher profits. This chain of events has led to the forecast for gold mine stocks becoming far more favorable.
Short term traders do not get to benefit from gold mines with any sort of ease, though. Day trading stocks is often a costly process, and it has kept many would be traders out of the market, and it’s caused countless more to lose a lot of money. Day traders are required to have at least $25,000 set aside in a margin account, and then tens of thousands of dollars more are needed to push the odds into their favor when it comes to overcoming variance. Finally, the cost of executing multiple trades per day needs to be accounted for.
There are ways around costly fees, such as using a discount broker, but this doesn’t get you around SEC enforced margin requirements. You can use other sorts of brokers, though, so that this law does not apply to you. The two big examples here are Forex brokers and binary options brokers, but neither of these allow you access to gold mining stocks because these are not large cap stocks. This is where you need to get creative. Many Forex brokers do give you access to commodity trading, and gold is a heavily used commodity in this arena. Binary options brokers also will let you trade gold as an underlying asset, and some of the larger brokers will let you pair gold up against another asset, like the U.S. dollar, and predict which one will do better than the other, percentage-wise. Both of these methods allow you to use gold’s short term movement and turn it into a profit.
However, because there are so many long term profit making opportunities out there, it is smart for even traders with the shortest of focuses to start thinking about long term moves. The quicker you act here, the better, simply because the longer you wait, the higher prices are likely to get. This allows you to add a layer of security to your money, alleviate some of the extra risk that comes along with taking short term positions, and it also can be used to explore new money making opportunities. For example, once you have money in an investment brokerage account, you can not only take out long term positions with growing gold mines, you can find exchange traded funds (ETFs), that place a focus on the price of gold and the industry around it. This method is not available through a binary options or Forex broker, but that doesn’t mean that it’s not a valid method of creating personal wealth. It is just another tool to keep in your portfolio.