Gold Traders: More Diligence in Gold Trading in 2011

According to the market experts, gold prices in 2011 are expected to reach a range of $1455 to $1480 per ounce. Such an increase in gold prices is an outcome of the popularity of gold as a metal asset. Pardeep Unni, the senior analyst at Richcomm Global Services in Dubai, says that he is convinced that “fundamentals based on market uncertainty are still driving the price, and those fundamentals are intact."

Gold traders claim that the surging gold prices will not cause any negative effect on the sales of precious metals including individuals who buy gold coins. Contrarily, people still appear keen to buy gold jewelry despite the fact that the resale value of gold in jewelry form is low. Tomy Joseph, managing director of jewelry chain Joyalukkas, in his interview with Gulf News stated, “People still prefer to buy gold as it looks like it is one of the few commodities which is still appreciating.”

Top 5 Gold Traders

Regarding different countries holding their respective places in gold trading in 2009, the report of the Ministry of Foreign Trade reveals that:

• The United States occupies the first place, with an 11.5% share of global gold export measured, at a value of $12.1 billion.
• Australia is next, with a share of 11.2%.
• UAE ranks third, with a 10% share of global gold exports, at a value of $10.5 billion.
• Hong Kong comes in at the fourth place, with a total 9.5% share valued at $10 billion.
• Canada ranks fifth, with a share of 7%, valued at $7.3 billion.

Industry experts say that gold trading is one of the most profitable businesses and is not as complicated as it seems. Gold traders buy gold from suppliers in chunks at particular prices and sell it to other traders, jewelers or gold dealers at the prevailing market price, hence, making considerable profits.

Restrictions Imposed on Gold Traders

In the United States, with gold selling at more than $1,400, many people are tempted to sell off jewelry and other gold items to make huge profits. At the same time, the US police is working hard in order to stop thieves from taking advantage of these soaring prices by making it difficult to sell stolen gold.

"We want to caution people that care should be taken to buy from and sell to only licensed second-hand dealer," Phillip Sanchez, Police Chief in California, says. "This helps to prevent crime and will prevent people from buying stolen property unknowingly."

According to the US government, such stringent measures are necessary for gold trading so that people do not end up buying stolen property knowingly or unknowingly. As declared by the law, business operators who are found buying or selling gold without acquiring the legal certificate are subject to arrest with a $1,500 fine and due accusation of dealing in stolen gold.

As a huge amount of gold means a huge amount of cash, this business is more prone to scams than any other business. As long as a trader conforms to the law and follows certain guidelines, big profits can be earned without involving a huge amount of risk. It is crucial for a gold trader to understand the market in detail for successful dealings. As seen in the past, the price for gold is the one thing that is never going to be constant. It varies on a daily basis and, therefore, demands a lot of market knowledge and expertise for wise trading.