Gold prices peaked during the fourth quarter of 2011 and remained high up until the first quarter of 2013; now, they are sliding back down, impacting the binary options traders who trade on this commodity.
Online PR News – 29-October-2013 – Limassol/Cyprus – Gold prices experienced a sharp decline throughout most of 2013 so far, slipping from YTD highs around $1675.00 to now hovering between the $1200.00 and $1300.00 range. This volatility comes on the heels of improved investor sentiment towards the stock market and confidence in the global economic recovery. As the stock market recovers, gold prices decline. As gold prices slip and then begin to level off, binary options traders are impacted by the volatility in a couple of different ways.
A number of factors traditionally impact gold prices. Politics is one example; commodities like gold tend to skyrocket as people hedge their bets against other markets, such as the stock market, by investing in gold. Demand is another driving force, both in the manufacturing industry as well as gold used in jewelry and other consumer goods. When these factors shift, so does the price of gold.
The implied volatility currently impacting gold stems from these shifts in the market sentiment away from commodities and towards the stock market. This volatility has little impact on binary options, but traders are still monitoring it closely as it can create opportunities when there are pre-determined expiries, generating higher payouts.
The recent historical volatility of gold reveals some wide short-term swings as well, which presents more immediate opportunities for binary options traders as the shifting prices allow them to cash in on the swift movements in the market.
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