Gold is a widely traded commodity, but its price has far reaching implications beyond just its price. Gold has a very strong influence and is influenced by all sorts of economic events, so keeping an eye on the price of gold can help you in your trading in a big way, even if you never invest in the commodity itself.

First, there are some things you need to know about gold. As far as wealth goes, it is widely used as a method of storing valuables in an alternative manner. A lot of people store cash or stocks for this reason, but gold has long been considered a safe way to store wealth, too. It makes sense; for many years, the U.S. dollar was tied to the price of gold until President Nixon took the U.S. off the Gold Standard. Even though the dollar and the gold are not directly connected still, they are closely related and the actions of one can affect another. For example, if the dollar goes up the price of gold often goes does, and vice versa. In today’s global economy, many long term investors tend to transfer money between these two assets on a regular basis. When one begins to drop, investors put their money into the other for protection. Even with all of the other currencies out there, gold is still seen as one of the most lucrative and safest places to put your cash.

Gold has relationships with other assets, too. Looking at other currencies is an obvious first spot to start, but there are other things that you can look at too. For example, look at Australia’s markets. Gold and the Australian dollar are closely related because Australia is one of the world’s largest exporters of gold, and this means that there are a lot of gold related businesses in Australia. Learning how to trade these companies just based on what gold is doing can be very profitable over a short period of time. If you’re looking to trade binary options, this might be a little more difficult because not all of these companies are internationally traded, but you can definitely extrapolate information from them to use in binary trading. Centamin, a company based out of Western Australia, is a major public company traded on the London Stock Exchange, and it is a major indicator of the gold industry in Australia. They are involved mostly in mining and the extraction of gold, but their success hinges upon bringing gold out and making it available for others to buy. Because they are internationally traded, this is a great indicator of the price of gold around the world, and the health of Australia’s economy as a whole. In short, tracking gold will give you a better idea of how these companies are doing. When gold is going up, it’s for a reason, and if that reason is that companies are exporting more, those companies will be seeing big rises in their stock prices, too. Obviously, this success can also be translated into stock exchanges, shorter term bonds, and ETFs, too, if your placement and timing is right..