Why Gold Didn't Go Down Under

Gold is a most useful metal in Jewelery and other products like mobile etc.

AUSTRALIA IS MOSTLY known for koala bears, kangaroos and Foster's beer. The central bank in Sydney rarely figures prominently as a major actor in global financial markets.

Yet, the Reserve Bank of Australia's surprise decision to raise interest rates Tuesday set off a global surge in gold prices and provided new evidence that emerging economies will likely recover from the global credit crisis before developed nations such as the U.S. Australia increased rates 25 basis points to 3.25%, while U.S. rates remain between zero and a quarter percent.

Australia's decision created massive trading in gold options, futures, and stocks as a hedge against U.S. inflationary pressures and weakening U.S. dollar. Similar trading occurred in European and English markets where investors also fear a hangover from coordinated central bank efforts to stabilize the global economy after the credit crisis.

Indeed, Australia's rate hike, coupled with ongoing fears of Israel bombing Iran, may prove to be a milestone in how gold trades in the options market and elsewhere. By all accounts, gold has entered a new trading range that portends higher prices.

"No one knows how far gold prices will increase," a top options market maker said. "Remember what happened to oil last year? It kept powering higher and stocks surged as short sellers were taken out."

In the past, many traders reflexively sold short-term call options or used other trading tactics to profit from gold's inevitable loss of momentum every time it surged higher. Panic peak prices are typically followed by price declines because everyone has spent all of their money chasing gold higher, and they have nothing left to spend. But buyers remain active for gold and related companies even as the price of SPDR Gold Shares(GLD), the primary proxy for gold, was recently unchanged at about $102.

Upside call buying also is active in Newmont Mining (NEM),Barrick Gold (ABX), Yamana Gold (AUY), Gold Fields (GFI) andHarmony Gold Mining (HMY).

Real-world economic concerns, rather than trading tactics, seem to be increasingly weighing upon traders who want to own gold -- not trade it -- so that they can protect themselves against the inflationary effects of the U.S. Federal Reserve printing money to end the credit crisis.

Some options traders say there is now ever-present demand to buy gold as a hedge against macroeconomic and geopolitical concerns. In the past, options were primarily used to take advantage of gold's price swings, rather than as a tool to cost-effectively buy gold.

The persistent demand for gold is firmly reflected in the prices of options on SPDR Gold Shares.

The implied volatility of GLD's call options, which increase in value if GLD's price rises, are incredibly expensive. This reflects demand for bullish calls, and also shows the reluctance of market makers who are forced to sell calls into a powerful rally to maintain an orderly market. In normal markets, the price of out-of-the-money puts tends to exceed call prices. Why? Because investors tend to be more afraid of losing money, rather than missing an opportunity to make money.

That Australia figures so persuasively in this ongoing conversation about how the world recovers from the credit crisis will surprise many people. Australia, however, is a backdoor play on fast-growing Asian markets. Australia is rich in the commodities that Asia needs to propel its growth.

As economic expansion in major countries is expected to be modest due to the legacy of the credit crisis, Glenn Stevens, governor of Australia's central bank, said prospects for his nation's Asian trading partners appear noticeably better.

"Growth in China," Stevens said in a statement announcing the bank's rate hike, "has been very strong, which is having a significant impact on other economies in the region and on commodity markets."

For now, everything that is wrong with the world is reflected in the price of gold. As it seems those problems are not likely to subside anytime soon, traders say it is unlikely gold prices will significantly decline in the near future.

This article taken by online.barrons.com .

Diamonds Investment

Investment Diamonds

Many people think of diamonds as an investment. In recent years they have increased in value but there are numerous reasons why we do not think diamonds should be considered for investment purposes.

1) While De Beers does, to a great extent, control the distribution and pricing of rough (uncut) diamonds, they do not control the price of polished diamonds. Polished diamond prices fluctuate up and down and are highly impacted by things such as interest rates and inflation. During the high inflation period of 1978-1980 in the U.S., white diamonds were approximately 4 times more expensive than they were twenty years later.

Click here for our discussion of diamond prices

2) Top quality diamonds are more liquid than real estate but less liquid than stocks or gold. It will take some time to find a buyer for your "investment" diamond. Expect the wholesale or retail buyers to offer you much less than they are selling the same diamonds for.

3) Like any good investment, the purchase price is just as important as the selling price. Do not expect to buy a diamond at a jewelry store with 100% mark up and then expect to make money selling it in a couple of years. If you do not have a retail source that is able to sell you at 5 to 10% over their cost, you are paying too much.

4) The diamonds that have historically been the best investments are natural colored diamonds. Blue and pink diamonds are hundreds if not thousands of times rarer than D color white diamonds. While the diamond buying public is becoming more expert in white diamond shopping, colored diamonds still tend to be a mystery to most shoppers in terms of quality and price.

5) Beware of dealers who put all the emphasis on what percent off "Rap Price" they are selling diamonds. Just because a diamond is priced to you at 40% below the Rapaport List Price, does not mean it is a good value and it certainly does not guarantee it will be a good "investment." Cheap diamonds are often just that, cheap. The Rapaport Price does not take into account cut, polish, symmetry, fluorescence and appearance. Some diamonds are better values at 5% below Rap Price than others priced at 40% below Rap Price. Unless you are a diamond expert and trade (buy and sell) every day, do not expect to master the diamond pricing game.

Click here for our discussion on Rapaport Price

6) Many of the sales pitches given for investing in diamonds have to do with the high value in a small size, easy to hide, easy to transport and anonymity for both the seller and buyer. These aspects seem to have more to do with tax evasion, money laundering and fraud than they do with ethical and legal investing.

7) Many diamond shoppers have been told that their investment will hold its value better if they buy a very high quality stone. On the surface, this sounds reasonable but this logic fails to take into account the effect of supply and demand. Since there are many more buyers seeking diamonds with H color and VS2 clarity than D color and IF clarity, these H/VS2 diamonds tend to be easier to sell and often have appreciated at a higher rate than the D/IF stones.

Ten Year Diamond Price Performance (One Carat Diamond)

As the following chart shows, over some time periods very "high quality" diamonds have appreciated less than "high demand" diamonds. While most shoppers don't intend to have to sell their diamond in the future, it still makes sense to invest in an asset that is expected to appreciate and that has a large potential market for a sale when needed.

Ten Year Diamond Price Performance (One Carat Diamond)

Advice: While most shoppers don't intend to have to sell their diamond in the future, it still makes sense to invest in an asset that is expected to appreciate. If investment appreciation is an important shopping requirement for you, seek VS1 to VS2 clarity range, G to H color range and the best cut possible.

Beware of retailers who tell you that your diamond is "investment" quality if it has high clarity (IF or VVS). We talk to a lot of customers who bought "investment" diamonds in the past who paid premium prices for very high clarity but still had low color, poor cut and/or strong fluorescence. Just like real estate, if you want to sell a diamond you must find a buyer willing to purchase. If your diamond has low color or poor cut, you will have a hard time finding any buyer, let alone one willing to pay what you think it is worth.

This article taken by diamondsourceva.com.

Forex Multiple Trading

To improve the efficiency of our trading strategy. We see the major Trend using a higher time frame than what we intend to use & a lower Time frame to enter a trade.

Say we want to trade using the Daily Charts. We take the Weekly charts to see the major trend. Suppose it's an uptrend in a Weekly chart. We will tend to trade only long positions. We will use entries in the daily charts to enter long positions only.When sell signals are generated we will just exit our long positions. I.e. we don't short sell.Suppose it's a downtrend in a Weekly chart. We will tend to trade only short positions. We will use a entries in the daily charts to enter short positions only. When buy signals are generated we will just exit our short positions. I.e. we don't enter long positions.Now that we are using two timeframes. Now coming to timing the entry of trades or adding additional positions. (Pyramiding) We can further use a Hourly chart to time our entries. Suppose the weekly & daily charts are in a uptrend. We will enter a long position or an additional long position when a hourly chart gives us a buy signal. Suppose the weekly & daily charts are in a downtrend. We will enter a short position or an additional short position when a hourly chart gives us a sell signal. This timeframe would not be used to exit the trades. It's solely to improve the timing for entry. For exits we would use the signals generated in the daily charts.Using multiple time frames to trade.We take three charts of the same security. First is the weekly chart. Next chart is the daily chart. Third chart is the hourly chart.We will now use the daily chart to trade. We check the weekly chart for the weekly trend. Lest assume the weekly trend is up. So based on this information we will just trade long positions in the daily chart.We look for a buy opportunity in the daily chart or we can see the hourly chart to enter a long position.Now for entering additional positions we use buy opportunities in the hourly chart. We would exit based on the daily chart only, because we were trading based on the daily chart.Similarly we can trade short where weekly charts are in a downtrend and daily chart generates sell opportunity. Additional positions are entered whenever sell opportunities are generated on the hourly charts.For Day trading we can use the Hourly, 15 Min and 5 Min charts here we trade the 15 Min chart. Or we can use 15 Min, 5 Mins and 3 Mins charts here we trade the 5 Mins chart.

Forex Trading Currency Useful Information

When you trade in the forex exchange, you are working with foreign stocks, money and corresponding kinds of products. The monetary value of one nation’s money is set against the same from a different nation to figure the value. The entire value is counted when buying and selling stocks on the forex markets. Most nations have control over the entire worth of their country with respects to monies. Those who are frequently engaged in the FX markets include banking institutions, large business enterprises, international administrations and finance companies.

So what makes the forex market dissimilar from their US counter parts? A forex market transaction is a trade between two countries, and occurs all over the world. The two countries must be 1, the country of the investor of the funds and 2, the country where the finances are being given. Most all transactions taking place in the forex market are going to be qualified through an experienced broker such as a bank.

What is involved in the forex stock exchange? The overseas market is comprised of a mixture of financial exchanges amongst nations. For those invested in the forex exchange are trading in large volumes and huge amounts of money. Those who are involved in the forex market probably have financial businesses or in the trade of very liquid assets that you can sell and buy fast. The market is large, very large and it would not be wrong to imagine the forex stock market as even more immense than an individual market exchange in any one country.

Forex traders 365 days per year, twenty-four hours a day is completed on the weekend, but not all weekends.

You might be surprised at the great number of investors who issue trades on the forex exchange. In the year 2004, almost two trillion dollars was the median forex exchange trading volume. This is an immense number of trades with regards to the amount of daily dealings at a time. If you imagine how much a trillion dollars amounts to and multiply that by two, and this figure is the money that is changing hands every day!

The forex exchange has been around for thirty years, but with computers coming into play and the global web, the forex exchange is growing exponentially as growing numbers of investors start to understand the power of the forex market. The forex exchange accounts for only 10% of the sum of all trades between two countries but as its popularity grows so will its number of transactions.

How to Calculate Rollover Interest?

In the Foreign Exchange Market or Forex market, Rollover is a method of stretching the arranged clearing date or what is known as the settlement date of an open position. Mostly, in common currency trades, trades ought to be completed in two business days and traders who wish to stretch their positions with no intention of settlement must close their positions before 5:00 in the afternoon Eastern Standard Time on the date of settlement day, plus re-opening of them the next trading day. This means by rolling over the position, this at the same time closes the existing positions at the daily close rate and again coming into a new opening rate at the next trading day. This precisely means that the trader is indirectly extending the settlement day by one more day.

This is also known as tomorrow next strategy, it is functional in forex due to many traders have no purpose of getting delivery of the currency they buy but instead they have the intention of getting profit from fluctuating exchange rates. Since rollovers shove out the settlement by another two trading days, it may cause a gain or a cost to the trader depending on the existing rates.

Apparently, Rollover is when you reinvest funds from a mature security into a new issue of the similar security or same security. You are transferring the holdings of one retirement plan to another without the agony of tax effects. Plus a charge is incurred by Forex investors who extend their positions on the following delivery date.

Rollover interest is the net effect of the money borrowed by an investor to purchase another currency and such interest is paid on the borrowed currency and earned on the purchased currency. To calculate this interest, you should get the short-term interest rates on both currencies, the existing exchange rate of the currency pair and the number of the currency pair purchased. For instance, an investor possesses 15,000 CAD/USD. The present rate is 0.9155, the short term interest rate on the Canadian dollar (base currency) is 4.50% plus the short term interest on the US dollar (quoted currency) is 3.75%, so the interest would be $33.66 [{15,000 x (4.50% - 3.75%)} / (365 x 0.9155)].

If on the contrary, the short term interest rate on the base currency is lower than the short term interest rate of the borrowed currency, the interest rate would result into a negative number which may reduce the value of the investor’s account. Such interest can be avoided by taking a closed position on the currency pair. If an option is about to expire is quite favorable to grip, you can either buy or sell the later expiring option. Always note the interest rate that is paid by a currency trader or he may received in the course of these forex trades is considered by the IRS as ordinary interest income or expense. For taxation, the trader of the currency should always keep track the interest received or paid, separate from regular trading gains or losses.

Stocks Extend Gains in Mid-Day Trading

Stocks have extended their gains in mid-day trading, with all three major indexes currently sharply higher. Stocks are bouncing back after three straight days of losses on speculation that President Obama will launch a $300 billion package to support jobs growth. A German court’s decision to reject a case seeking to block the country’s participation in bailouts of euro zone countries also boosted global equity markets today.

At last check, the Dow Jones was trading 1.84% higher at 11,343.95, the S&P 500 was trading 2.30% higher at 1,192.08, and the Nasdaq was trading 2.34% higher at 2,531.69.

All sectors in the S&P 500 are up sharply in mid-day trading. Industrials and Conglomerates are leading the gains in the S&P 500 in mid-day trading. At last check, Industrials were trading 2.69% higher, while Conglomerates were trading 2.49% higher.

Energy stocks have also bounced back sharply after Tuesday’s losses. At last check, Energy stocks were trading 2.65% higher. Among the major gainers in the Energy sector in mid-day trading are Exxon Mobil Corporation (NYSE: XOM), which is currently trading 2.29% higher at $72.78, Chevron Corporation (NYSE: CVX), which is currently trading 3.18% higher at $98.65, Schlumberger Limited (NYSE: SLB), which is currently trading 3.04% higher at $76.58, and Halliburton Company (NYSE: HAL), which is currently trading 2.74% higher at $41.99.

Other major gainers in mid-day trading are MELA Sciences Inc. (NASDAQ: MELA), which is currently trading 66.52% higher at $3.73, FuelCell Energy Inc. (NASDAQ: FCEL), which is currently trading 20.39% higher at $1.24, CONN’s Inc. (NASDAQ: CONN), which is currently trading 34.01% higher at $7.29, and VeriFone Systems Inc. (NYSE: PAY), which is currently trading 2.91% higher at $36.09.

Among the major losers in mid-day trading are Navistar International Corporation (NYSE: NAV), which is currently trading 0.26% lower at $38.70, National Retail Properties Inc. (NYSE: NNN), which is currently trading 1.73% lower at $26.14, and Royal Gold Inc. (NASDAQ: RGLD), which is currently trading 2.33% lower at $78.82.

Forex Market Worldwide

Forex is a buying and selling system also referred to as FX or foreign market exchange. Those concerned in the foreign exchange markets are some of the largest businesses and financial institutions from around the world. They deal in multiple currencies from many nations to produce a balance as some are going to gain money and those who fall down. The basics of forex are similar to the form of dealing found in any country, only much bigger and complex. Forex buying and selling involves individuals, currencies and trades from around the world, between every last country.

Different currency rates happen and change every day so the measure of the dollar on one particular day of trading might be different on the next trading day. Forex trading can be hard to keep track of so you must dedicate yourself to keep an eye out on your funds, especially if you have invested a great amount of them, there is a chance you could lose it all. Primarily, trading in the forex exchange occurs in Tokyo in New Your and in London as well as several other spots around the globe.

The types of currency that are commonly traded are the Swiss franc, the Australian dollar, the British pound, the Japanese yen, the Eurozone euro, and the United States dollar. You can cross-trade currencies and you can intermingle one currency trade to another in order to attain supplemental interest and monetary gains.

The regions included where forex trading will start at one hour then shut down as other markets start to open shop. This is seen also in the stock exchanges from around the world, as different time zones are processing orders while making other transactions during various times. What happens in forex trading in a certain country might create various results in another forex exchange as time zones dictate the opening and closing of forex markets. The exchange rates will be varied between forex exchanges, and brokers and day traders alike will want to know the rate changes for each new day before committing money.

The stock exchange is primarily measured on products, prices, and other factors within businesses that could alter the cost of shares. If someone knows what is going to happen before the general public, it is often known as inside trading, using business secrets to purchase or sell stocks on that information — which is punishable by law. There is very little, if any at all inside information in the markets of forex. The monetary trades, buys and sells are all a part of the forex market but very little is based on business secrets, but much more dependent on the status of the currency, economy of any given country.

Code are given to each type of currency on the forex market exchange so no confusion exists when knowing which currency one is investing with at the time. EUR is the symbol for the euro and the US dollar is known as the USD. The GBP is the British pound and the Japanese yen is known as the JPY. If you want to get involved in the forex market and want to contact a brokerage then you should have no problems finding and online brokerage where you can investigate the type of exchanges and profile ahead of throwing your money down the drain.