What is involved in technical analysis of gold?
technical analysis of gold is the decay of the history of the Gold market compared to current and future events. Like all forms of technical analysis, this process concerns prediction. The basic theory simply states that every situation repeats if it happens again. If the price of gold changed when an event occurred, if this event happened again, the price would change in the same way. The validity of most of the theory of technical analysis is in the dispute in the modern economy.
The basics of technical gold analysis seem very simple, but in fact it is very complex. In order to understand the reason for the change in market value, the analyzer must understand everything to know about the situation at that time. This means that they must study the context of the area of demand and the area of supply to understand the overall chain of events that led to any change. This often needs further study of the materials taken in foreign countries.
The technical analysis of gold is even more complicated than other materials. In the past, gold has been used as a measurement of wealth. This means that changes in the purchase and sale of gold were filtered through a basic understanding that it was an irrelevant luxury. In modern technologies, gold and gold plating are used in large numbers as a traction conductor. This means that gold is not only rare and appreciated as a luxury material, it also has a strong technological demand.
Gold technical analysis must look at historical metal data to see how social changes lead to values, but must also predict the effect of technological requirements. This modern use has a relatively small amount of data compared to more historical use. As a result, it is often difficult to bring the justification of goldening values of gold.
While the concept of technical analysis of gold seems solid, in practice it is not as effective as it wouldhl think investor. The biggest obstacle to this technique is the lack of understanding why something happened. For example, the South American Golden Mine loses most of its production during the drought; This change then causes the price of gold in the United States. Although it may seem very simple, it may not be. Drought could have been unimportant; Instability could be caused by a neighboring country, a bad year of fishing or any number of other factors.