Gold Trading

TRADING METALS

Precious metals offer insights into economic health and are often viewed as a safe haven during times of economic turmoil. As market demand is not driven by any individual geography, many smart investors trade precious metals in order to diversify their portfolio and hedge their positions, even when the markets are down.

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9.7 SCORE Read review

Plus500

Plus500 is an award winning client-friendly broker with excellent customer service. Well known for having one of the best investment mobile applications with many different types of trading options available. Reliable, Simple, Innovative. Join millions who have already traded with Plus500.

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  • Award: Best Broker 2018
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  • Tight Spreads & No Commissions
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  • Set Profit/Loss Limits
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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.

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8.5 SCORE Read review

IQ Option

Trade stocks, ETFs, Forex & Digital Options at IQ Option, one of the fastest growing online trading platforms. Sign up today and be a part of 17 million user base that trade online every day on this astonishing, user-friendly and fast platform.

  • Trading from 10$
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  • Forex, Options, CFD's and Digital Options
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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.

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7.7 SCORE Read review

Etoro

Trade and invest in cryptocurrencies, stocks, ETFs, currencies, indices and commodities or copy leading investors on eToro's disruptive trading platform. Join 9M Traders Today!

  • Trade with CopyTrader™
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Getting Started With Gold Trading

Gold CFDs are amongst the most commonly traded and hence one of the most liquid commodities you can trade and the advantage of this is that the spread is tighter and you should be able to enter and exit positions easily irrespective of the trade size Do keep in mind that gold is a very volatile market and daily trading ranges of $40 are common in a trading day. Which can also be very interesting from a traders’ perspective.

Why Trade Gold?

In terms of asset valuations, gold is viewed as being the global benchmark. It serves as a safe-haven for investors and a premier destination for short-term traders. External determinants of price including politics, central bank activity and supply/demand levels ensure consistent volatility.

Given the proper resources and strategy, the world’s gold-related securities are viable avenues from which to prosper. Futures, CFDs, ETFs and specific stocks all provide day traders with an opportunity to capitalise on any periodic fluctuations in gold’s value.

Trading Gold Online via CFD

Depending on how and where you trade, you will find variations on the gold CFDs available. For instance, you may take a CFD over the spot gold price, which is the currently quoted price, or can choose to trade a CFD based on the gold futures price. Typically, there are standard sizes of contract such as 10 ounces or 100 ounces of gold, and also mini contracts at 1/10 of the standard size.

Whatever the size of CFD contract, the profit (or loss) that you make comes directly from the change in value of that amount of gold. The margin, or amount you need to buy the contract, may be as little as 3% of the value. You will be charged interest for every day that you hold the CFD, as if you had borrowed the money from the broker to buy the full quantity. If the price goes down, and you have a long position, you may also receive a margin call, which is an order from your broker to submit funds to cover your losses to date.

Gold Trading Influences and Gold Trading Strategy

Several distinct factors come into play when analysing the movement of the Gold price:

  • Supply and demand – Most of the global demand comes from jewelry production and manufacturing (50%), and investment purposes (40%). Increased demand with low supply can mean a higher price, on the opposite end an oversupply, with weak demand can drive prices lower.
  • Market sentiment – Political uncertainty and/or instability contributes to global growth uncertainty and does help in the rising prices of gold.
  • Market volatility – Gold has often been used as a safe haven investment when markets are unpredictable.
  • Currency movements – The US dollar is a strong influencer. When the dollar falls, commodity prices around the world increase. The US dollar and gold have an inverse relationship.

CFD Markets For Gold Trading

Gold may also traded through the use of a financial instrument known as a contract-for-difference (CFD). CFDs are derivative products valued according to the price change of an underlying asset over a specific period of time. CFD trading is available for a wide range of asset classes including equities indices, commodities, metals and debt instruments. Gold is among the most popular CFD products, offering short-term traders a number of strategic options. CFDs are traded in a similar fashion to forex currency pairs. Extensive leverage is available, as is robust liquidity and depth of market.

Gold CFDs have several advantages over futures, options or equities:

  • No contract expiration
  • High degrees of leverage available (up to 200:1)
  • Low margin requirements
  • Easily convertible to cash

Tips on choosing the best CFD brokers to trade CFDs

  • It’s important that you choose an online stock broker that offers traders narrow spreads and cheaper finance for the various CFD products
  • Pick a broker who provides the essential trading tools and the app for mobile trading
  • Choose a CFD stock broker who complies with rules and regulations and offers specialised asset classes
  • Online CFD stock brokers should have access to tap into the global markets
  • Choose an online CFD stock broker who allows traders to open an account with a minimum deposit

Getting Started With Gold Trading

Compare the selected brokers and simply open a free account with the broker that fits you best. We highly recommend brokers with a free demo account so you will be able to get to know the platform before by live trading without risk. Best of luck!