Is It Possible to Earn Regular Profit from Gold Trading in 2022

Monday, April 5, 2021 Print Email

Many would argue that gold is well past its glory days in terms of its financial value, and recent data can certainly attest to that. On January 26th, 2022, the closing price per ounce was $1849, a decrease from the $1893 reported at the beginning of the month.

While this is nonetheless an improvement over its lackluster performance at the end of 2021, it is understandable that investors and traders alike are anxious about what lies ahead for this precious metal. Ultimately, whether or not it can help you earn a regular profit in the upcoming year is reliant on many factors.

History and Background

Before diving headfirst into a new trade endeavor with success as your goal, it is crucial to be familiar with its ins and outs. It is good to start by becoming familiar with its historical background, and gold certainly has quite the story to tell, since its usage as an indicator of wealth is nothing new. It has been used for monetary purposes as early as 600 BC, and even before that, gold was well-recognized among society for its worth.

Fast forward into the 1830s, we saw the creation of the United States gold standard that, eventually, spread internationally and remained in force for quite some time. Although the practice is long gone, the relation between Gold, interest rates, and the US Dollar remains a factor that affects this precious metal’s value to this day.

Throughout the 20th century and into the new Millenium, gold showed a continued tendency to preserve its worth, and inflation, as well as the drop of the US dollar, were beneficial to the value of this precious metal. Things cannot always be perfect, however, and in recent years, gold’s value has also proved to be volatile in the short term.

What Lies Ahead

Unsurprisingly, the opinions and predictions of analysts vary, although there is an overall pessimistic tone that can be noted. So far, a regularly heard belief is that gold will continue to underperform in 2022 and that it will further decrease in value by the end of the year. David Beatty of deVere Group even remarks that an increasing number of investors see Bitcoin as an alternative safe haven. However, he also notes that gold will not hand over the reins to Bitcoin anytime soon, and the precious metal will continue to be seen as the go-to hedge option for investors. Moreover, there are also those who argue that things will, as a whole, improve for gold in 2022.

Either way, it is always important to remember that predictions are just that - educated guesses. While there is certainly merit in expert forecasts, unforeseen or chaotic circumstances can easily pull the rug from under everyone’s feet.

It is thus unwise to completely rely on them for your trading or investment plans, and you must also not fail to take the inherent volatility of the market as a whole into consideration either, especially when it comes to trading gold.

For now, what we can say is that this precious metal alone is considered unlikely to become your core way of earning a profit in 2022 if regular profitability is your concern. However, this does not mean that gold trading cannot benefit your portfolio.

Its role as a diversifier remains important, not to mention that it is, and will likely continue to be the tried and true failsafe against inflation and tense economic circumstances if you wish to try investing in gold as well. Additionally, there are a variety of ways to trade gold nowadays, including gold stocks, gold futures, gold ETFs, and more, each having its own benefits and drawbacks that you must keep in mind.

As always, practice caution and make sure to stay informed and up to date with where the market is heading. A fast-paced and careful approach, backed up by thorough research, is what will determine whether your 2022 gold trading ventures will result in a regular profit, or whether you will run into unexpected hurdles.

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