Basic strategies on how to trade gold from beginner to advance level
Gold trading is setting its roots far down the market and has emerged as an excellent trading option in the current market. It allows traders to gain from long term trends and day-to-day price shift. Here we will deliver each and every point clearly which you require to know before investing in gold and gold futures. The article is the door for how to trade gold and harvest maximum profit from it. We will wrap up the entire text with the hours of gold trading and useful tip and strategies.
How to trade gold: The various ways for gold investment
Before jumping up on the sign up for an online trading account, it is essential to understand the basics of precious metal trading that is gold trading. Gold trading provides a large number of option for the traders who wish to invest their money in commodity trading market. These options are:
1) Bullions of gold: Gold bullions are noting just the physical gold which often comes in the form of specialised coins or bars. The worth or value assigned to the precious metal is determined by the unit weight or the kind of bullion. Hence, you can see that purchasing the larger containers of oil is typical in comparison to holding the physical gold in the form of coins and bars. However, there are other charges such as storage cost, insurance and transaction fees which count with the gold.
2) Gold certificates: It came into existence in the 17th century and reflected the ownership of investor. It is more or less alike the cash banknotes.
3) Gold futures: Micro futures and gold futures is the agreement on which both the parties agree to buy and sell on future data with a price determined beforehand. As it requires an exchange platform for trading gold futures, they promise to provide more leverage in comparison to physical gold trading.
Returns in gold futures depend on the variation in the cost between the date on which parties signed the contract and date of expiry.
4) Gold contract for difference: Gold CFDs are short term agreement or orders to sell or purchase a fixed quantity of gold. They have a fixed expiry, and returns from trading gold contract for difference largely depends on the price variation during the agreement.
5) Gold exchange-traded funds or ETFs: Gold ETFs are generally purchased from a stock exchange or a broker. They permit you to purchase the bulk of commodities, securities without the need to buy all the individual securities or assets. The main factor with the gold ETFs is their price is moderate or low, but their value is attached to the cost of gold.
6) Gold swaps: Gold swaps are traded OTC (over-the-counter) and are generally regarded as customer contracts. In opposition to this futures and options are observed on central exchanges.
Looking on the points provided above, it must be clear that for investing in gold, you need to a trusted and advance platform. There are various brokers around the world serving the purpose. One of the best brokers among the list of leading firms is the Oinvest. It provides three different accounts for trading in precious metals: the gold account, the silver account and the platinum account. Visit the official site of Oinvest for checking the trading charges on the gold account.
Strategies for investing in gold
There are various mechanisms and techniques which one can use while investing in gold. All these gold trading strategies require regular analysis and monitoring of the volume and price charts. The trader needs to check all the factors which are influencing or will influence the price of gold.
1) Check for market volatility: For checking the market volatility, you can monitor the real-time trading indicators present on your trading platform (Meta Trader 4, Web trader, etc.). This software respond according to the market shift providing you with every single information.
One thing to consider is that when the stock market falls trader move towards gold and likewise when the forecast of the stock market is strong, then traders show less interest in investing in gold.
2) Check for geopolitics: The geopolitical factor plays a vital role in deciding the direction of gold trading. These forces guide predictions today if you doubt then you can go through the history of gold prices.
A smart trader is known for its prior preparation for future risks. As soon as the financial market breaks traders move towards investing in gold. So, one should brush up and stay updated on the price.
3) Monitor demand and supply: Looking at the data for volume per day, one can see that more than 50% demand for gold comes from jewellery production. Rest about 40% reflects the investment accounts. Monitoring the price chart one will see that the when demand falls, supply surges and thus the price declines. In contrast to this, when demand surges, the supply decreases, and prices increase in response.
Risk and benefits of investing in gold
- The most significant advantage of gold trading is its ability of hedging against the period of inflation. In comparison to other treading currencies or other commodities, gold maintains its purchasing power at the time of inflation.
- Gold also remains on its ground at the tough times of global instability, when the value of other assets declines.
- There is a wide range of financial assets available with the gold trading. It includes gold bonds, gold futures etc.
- The volatility of gold is comparatively high. No doubt in this that the market has enormous potential to generate the massive returns, but at the same time a trader cannot refuse the fact that gold trading comes with some serious risk and you can lose money.
- One cannot predict the price trend of gold for the next week or a few days from the present rate.
- The trader has to pay the additional trading cost for gold trading. For example, gold exchange-traded funds come with the fee incurred by the broker.
Market hours for gold trading
The time for commodity trading around the globe may vary, but some of the popular commodity such as gold is available every time. We have provided the list below which carries the details of the trading hours and opening times of some primary gold exchanges.
1) Trading hours for online gold trading in London (United Kingdom): Opens between 08:00 and 17:00 (Greenwich Mean Time)
2) Trading hours for online gold trading in New York (United States): Opens between 13:20 and 18:30 (Greenwich Mean Time)
3) Trading hours for online gold trading in Dubai (United Arab Emirates): Opens between 04:30 and 07:30 (Greenwich Mean Time)
4) Trading hours for online gold trading in Jakarta (Indonesia): Opens between 02:30 and 10:30 (Greenwich Mean Time)
Note: Trading time for gold may change over holidays and weekend. The gold trading hours in countries (not mentioned above) like South Africa, Australia, Thailand, Europe, New Zealand, The Philippines and Canada run almost every twenty-four hours a day.