Spot the falling prices and you are likely to see the FTSE100 index move downward. This is exactly how commodity markets operate and there are several factors that can affect it. There are also some major currency pairs that tend to be affected by inflation worries and are susceptible to a sharp fall or rise during a trading day. Here are some of the major areas where the index futures market moves.
With oil prices at an all-time high, oil and commodities are a major part of the FTSE100 index. The two most important commodities, gold and oil, are often closely watched by investors due to their reliance on international trade. Speculation has been a key factor behind rising oil prices, which has resulted in sharp movements in the market. Gold is used as a method of storage of value, much like precious metals. Oil futures are traded on major exchanges like the New York Stock Exchange, London Metal Exchange and the NASDAQ. While the price of gas and oil has significantly risen, many traders have cut back on buying since the prices seem to be on the incline.
Gold and silver are commodities that are highly correlated to the FTSE100 index and the USD, making them very tempting to invest in. Demand for these metals has been very high, especially in times of economic stress or war. However, investors should be careful about investing in gold and silver as they tend to appreciate slower than the average prices. Spot gold contracts are also affected by inflation worries and are subject to significant changes during a trading day.
Currencies that directly rely on oil as a source of income include the USD, GERD and the NZD. USD/GHD and USD/NZD usually move in opposite directions during times of economic tension or conflict. The Swiss economy suffered greatly during the global recession of recent decades and the Swiss economy is now largely based on trade within the Commodity futures trading sector. In the same period, the UK’s growth was stalling and consumer spending growth in Europe was negative. As such, the Euro has appreciated against the dollar. Spot gold and silver contract prices also move in opposite directions amid inflation and pressure from external factors.
When it comes to investing in precious metals, one has a lot of options to choose from. Investing in bullion bars or coins is a common way to buy gold because the market for gold and silver remains open 24 hours across the globe. One can sell gold or silver as futures contracts and make a profit when the price of the precious metals rise.
Spot gold and silver prices usually track oil prices. In recent years, the FTSE100 index has outperformed most of the major indices including the Nifty, Dow, S&P 500 and the Japanese yen. The Swiss economy remains one of the most stable economies in the world. Inflation remains low, employment levels are high and budget surpluses remain large. Given all the positive economic factors, one can safely invest in gold and silver in the hope that the prices will appreciate in time.