Gold is treated as an investment class and even as a currency sometimes in the financial markets since it has the potential to generate profits or income if invested in wisely. Hence, Gold and Silver as a commodity or a currency is considered as an "ASSET CLASS" for investment. And tends to move with the financial markets.

In order to understand Gold as an investment class, the investor must also understand the financial markets and keep up to date with the markets everyday through news or online financial news platforms such as Bloomberg, Reuters, CNBC, etc, etc. Once the investor understands how the financial market moves every day, they can make more sound decisions about when to invest in Gold.

There are two main methods that analysts use to understand the markets:
  • Fundamental Analysis
  • Technical Analysis

Fundamental Analysis:

Fundamental analysis is the use and study of these factors to forecast future price movements of currencies.

Fundamental Analysis is the study and research of the news events that tend to effect the financial markets. Everyday there is news happening around the world including news events specifically announcing changes in fiscal and monetary policies around the world such as Interest rate changes made by a central bank of a country. Any news coming of the United States Of America is considered as the most market moving announcements and the entire financial markets keeps a keen eye on such news and makes speculative decisions in terms of buying or selling any asset class such as Gold or Silver before the event even happens. Such decisions also affect the markets in creating big moves sometimes.

Fundamental Data and Its Many Forms
In particular, fundamental analysis provides insight into how price action “should” or may react to a certain economic event. Fundamental data takes shape in many different forms.
It can appear as a report released by the Fed on U.S. existing home sales. It can also exist in the possibility that the European Central Bank will change its monetary policy. The release of this data to the public often changes the economic landscape (or better yet, the economic mindset), creating a reaction from investors and speculators. There are even instances when no specific report has been released, but the anticipation of such a report happening is another example of fundamentals. Speculations of interest rate hikes can be “priced in” hours or even days before the actual interest rate statement.

Technical Analysis:

The movement in prices of Gold and Silver and any other asset class is plotted on a chart as a price movement. These charts are then studied by Analysts to understand the past of the price movement and make decisions based on these movements for the future of the prices of the respective Asset Class. Such analysis is again purely speculative and just one method of understanding the financial markets and making decisions of investments based on the analysis. Analysts use different techniques and tools to study these price charts such as indicators , oscillators and lines and angles to make better decisions. This analysis method requires a more in depth knowledge and study of the markets and takes up to even years to understand and master.

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