Trading Gold and Copper


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If you take out a dollar bill from your wallet, on the top left it will read: This note is legal tender for all debts, public and private. Which means that every dollar is backed up by the good standing and credit of the United States of America’s treasury. The question on worth, comes not from the credit standing of the U.S. government, but on the amount of gold in the nation’s coffers. So while the U.S. may not be on the gold standard, or the silver standard, and now formulates its own worth by the credit standard, it is important to understand that all money, not just U.S. money is based on the price of gold per ounce. The U.S. is a banking nation, among the other venues it makes money, however, national wealth is often deemed upon the amount of gold it stores not only for its own personal use and economy, but also the amount of gold it stores for other nations. So the trading price of gold, as well as many other metals, is a major contributing factor to the stability of a nation.

GoldGold and copper

To understand the value of gold, you must first understand that gold while it is traditionally a rare metal, it is the basis for all world currencies, and has been that way since the birth of the monetary system. So the importance the global economy places on the value of gold, becomes the sole importance when trading it by the ounce because of its overall integral part on the everyday economics, and trading from one day to the other. At the height of the trading in 2011, gold was selling for $1,900 dollars an ounce! It has since then fallen to roughly selling at about $1,200 dollars an ounce. Experts agree that while gold traders are certainly feeling a hurt from where gold was once trading, to be at a low of $1,200 dollars per ounce is no small achievement. Economically speaking, the price of gold tends to jump up when the economy tanks, so the slight drop in price would correlate a better, or at the very least an improving global economy. Investing in gold is still a wise choice since when we look at the business cycle, we tend to overlook how capitalistic economies work with each other. Often the markets tend to sway quite frequently, and the ups and downs of economies tend to be unbalanced. For instance, it is much more likely to experience 10 years of economic growth, and in the wake of such economic success there will be 20 years of hard economic times.

For example: If you are investing in gold today, and you buy it at $1,200 an ounce and hold onto them for the next ten to twelve years, and the global economy tanks or drops again, and the price per ounce sky rockets, then theoretically the price would rise from $1,200 dollars per ounce, to the height of $1,900 dollars per ounce, you’ve raised a profit on every purchased share.

gold and copper 2Copper

Copper like gold, tends to rise in price when the economy does poorly. Now copper has always been rather valuable because of its many uses and ability to be melted into new products, done very easily. Currently the price of copper has dropped but not because of an improving economy like gold, but rather because there is a low in the market as far as producing and mining copper. This is a usual sag in sales and purchasing of copper that as experts have coined, are normal seasonal lags, often because of the winter months. Construction projects tend to slow because of the colder weather, and the uses for copper in industries other than technologically based, are less likely to be buying up the reserves of copper. So if copper is being less consumed, than the refining and mining operations in order to meet the demand will either slow or speed up according how copper is being bought and traded. This seasonal lag, is predictable, so if you are looking to invest in copper, then investing is more of a safe bet because we understand that in the coming warmer months, the demand will go up and so too will the price. You are better to buy it now while the price is at a market low, so that you can sell at a much higher price in the next few months.

Gold and copper sales and prices are not as low as many would suggest it to be. The trading of the two metals will rise, copper will get better with the warmer months, and gold will rise in time. But the lower price right now can afford you profit down the line should the economy come to a slower stance, if not in the next couple of years, it will in time if you are looking for a long term solid investment.

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