Gold Trading: A Guide for Beginners 2022

gold trading

Gold is a safe haven trading precious metal that has been a choice for many traders and investors. Be it a bear or bull market; the gold market has always had opportunities for traders to trade gold.

Holding a unique position in the financial market, gold is an ornament that stores wealth and is a medium of trade. The shiny yellow metal, therefore, is preferred by most traders. Moreover, the evolution of trade has brought many ways to trade gold.

They can own it without physical gold and other technological ways. To learn about gold trading in detail, here we have a discussion on this unique trading instrument.

How to Trade Gold?

As gold trading holds a significant market position, it becomes important that traders are aware of trading in gold. The price of gold, market factors, economies, risk of losing money, and several other aspects are required to be studied for desired results.

In addition, gold has evolved so much that traders can go with CFDs, ETFs, Futures, Options, and another derivative trading of the instrument.

One can trade in these as a safe haven without having physical ownership or can use them as jewelry to store and increase wealth with physical ownership.

Gold is a great instrument to diversify the portfolio and make high profits. But how to trade gold is a question most traders face. To answer this, we have described the process below:

Learning about Gold Trading

The first step toward gold trading is to understand what is gold trading? Gold trading and investing are two different things; when an investor invests in gold, they are taking ownership of gold.

They earn from the rise in the price of gold and thus make a profitable trade. Whereas gold trading is to take a position on the underlying price rise and fall of gold without having the ownership of the asset.

As mentioned earlier, traders can trade or invest in various gold types. Here, we have mentioned the types of gold below:

  • Spot gold is traded on the spot, usually having the price of one troy ounce of gold. 
  • Gold bullion is physical gold in coins or bars. Traders interested in increasing wealth with physical gold go with this type. 
  • Gold CFDs are the underlying gold trading without ownership trading on the rise and fall of the price of gold. CFDs are complex instruments. 
  • When trading gold, futures are also a popular type. Traders exchange gold at a certain price and date specified by the parties with the obligation of trade. It could be a physical or cash-settled trade. 
  • Another derivative trading of gold is options, which works similarly to futures trading. Traders with options contracts have no obligation to trade when buying. It allows them to trade gold on a specific date and time with an exchange of physical or futures. 
  • Gold stocks are an indirect exposure to gold trading. It provides exposure to every element of the gold industry. 
  • Gold ETFs are easy to trade, and they track the movement of shares of the publicly traded gold mining.

Know What Moves Gold?

Gold is a traditional commodity or metal that has been a source of trade for years. Every person on this planet has some point of view on this trading instrument. However, gold reacts to certain factors that impact its price.

The gold price is moved by the following elements that impact the sentiment, trend, and volume of the trading gold:

  • Supply and demand
  • Inflation and deflation
  • Greed and fear

Supply and demand for gold are the major factors to move the price of gold. When the demand for gold increases, its price soars higher in the financial markets. 

In addition, it is used for a variety of reasons among traders, such as jewelry, ETFs, technical instruments, and others.

When the demand is more, the supply of gold reduces; being a precious metal that is extracted from the earth’s surface. It is also said that the global mining of gold has reduced as many companies are cutting down their exploration.

Inflation is a market situation where the price of goods and services rises in the economy. When this happens, the gold price doubles, making it difficult for traders to buy, but traders already possess it to enjoy profits.

While deflation is in contrast to inflation, the price of gold declines, and traders can afford to take it home. However, the reduced price is a sign of loss for traders already having gold.

So, inflation and deflation impact the purchasing power of the traders.

Greed and fear of traders is the third factor that moves the price of gold in the market. When traders have high greed, they purchase, and this increases the price as demand increases and supply is limited.

Fear of losing is the aspect that moves the price of gold in the market. When traders fear the loss, they trade carefully; this is where they trade and thus move the demand and supply of the gold and the value of gold.

Moreover, gold is a safe haven which impacts its trade in the market. The value of gold is generally high attracting millions of traders and investors. They trade in the market to have gold in various types and ensure good market profits.

Thus, relying on gold for safe trading and going for long-term trades.

Deciding on Trading Gold

The most popular trading instrument, gold, trades in a range of ways in the markets. We have mentioned the types of gold assets, and traders can select the best one to trade gold. Gold as a safe haven is profitable in all ways.

However, traders should consider the risk of losing money rapidly as the markets are volatile and can take a turn.

A trader can invest or trade-in gold CFDs, gold futures, gold stocks, options, or gold bullions. Any one of these could be chosen for trade as gold is a precious metal and holds high worth.

Each of these types has its pros and cons; traders can analyze the market and value of gold before trading.

Trading Account

In trading gold, the trading account holds a special place as, without this, traders cannot start trading gold. They need an account to trade in the market, know the market aspects, the value of gold, access tools, trading platforms, etc.

These help traders analyze the market, do research, and then trade in gold. Be it gold futures or CFDs, traders should have an account. It supports traders in trading gold with advanced services.

Moreover, the high risk of losing could be minimized with the risk management techniques and other trading strategies.

These are of great importance for traders, and the brokers such as Investby offering the accounts keep traders in mind with their services and facilities. 

The storage services, customer support, and advanced tools make them the best choice for traders.

Market Opportunity

Once the account is created, gold traders can start looking for opportunities in the market. They can use the range of trading tools and indicators provided by brokers like Investby to trade gold.

The expert advisors, charts, technical indicators, fundamental analysis tools, trade alerts, and other services could be used for market analysis.

All of these support traders of gold to know the market, find the best opportunities, and make most of their gold trade.

Take Market Position

The next step in how to trade gold is to open the first market trading position in gold. After finding a market opportunity, traders can trade in the gold asset, which they find appropriate as per the trading style and market environment.

The trader should decide in advance whether they will go long or short in the gold trade, with position size and risk management in mind.

Monitor trade and Close Position

The final step of the process is to monitor the trade regularly to analyze fluctuations and make correct decisions. When traders follow continuously, they can afford to make quick decisions and have good trading in precious metals.

Therefore, monitoring the position, the price of gold, market segments, etc., is important for a successful trade.

Traders can close their position once they achieve profits and should go for another trade. They can even close their position when the market takes a reversal.


Gold is a prominent precious metal in the financial market; traders highly prefer trading in gold to make money. Traders can have various gold assets to invest and trade for a store of value or simple exchange.

The article has taken the whole process of how to trade the gold with simple steps to assist readers and traders. They can go through this and enhance their knowledge of the same. In addition, they trade smoothly in the gold market, making huge gains.