Speculators, funds, and investors trade gold all across the world in an effort to benefit from changes in market prices or protect themselves against inflation. Learn about the basics of gold trading, what affects the price of the metal, and how to invest gold stocks, futures, and options.

Trading in gold involves speculating on its price in order to profit, often through futures, options, spot prices, shares, & exchange-traded funds (ETFs). The transaction is often paid in cash rather than handling actual gold bars or coins.

You could opt to trade gold for a variety of reasons, such as sheer speculation, a desire to purchase and acquire genuine gold, or even as a hedge.

When trading gold, you don't always have to adhere to the conventional maxim of "buy low, sell high" because you may go short and long on gold prices, profiting from both rising and falling markets. The goal of gold trading, regardless of your stance, is to forecast the market's future course. The more the market goes in the way you anticipated, the more money you'd make; the more it moves in the opposite direction, the more money you'd lose.

What affects the gold price?

Like other exchange traded markets, the price of gold is influenced by supply and demand. Therefore, the gold price will decrease if the market for gold becomes oversupplied but also gold demand does not increase to keep pace with supply. Additionally, the price of gold will increase if there is a growth in demand without a corresponding rise in supply.

The primary variables influencing the price of gold are:-
  • Economic and political unpredictability: Gold is seen as a secure asset, which means that it is utilised as an inflation hedge during unstable times. The historical usage of gold as a store of wealth and its consistency across time have given it the reputation of being a safe haven. Trading and investing may decide to keep their wealth when inflation increases.
  • Industrial uses: Jewelry, technology, and investments account for the majority of the demand for gold. The market is rather steady since there is an ongoing and varied demand for gold. For instance, investment flows would prevent the price of gold from experiencing severe changes even while economic uncertainty would reduce demand for jewellery and other items.
  • New discoveries: Because there is a limited amount of gold available, new gold mining endeavours will ultimately stop being economical. However, for the time being, mining continues to furnish 75% of all gold. Therefore, each new gold find will raise the metal's supply and raise prices in the near run. Recycling, primarily from jewellery or technology, is the second-largest source of supply.

How to trade gold online

You can trade gold by:

1. Create a trading account

2. Choose which underlying gold market you want to trade

3. Open your first position

4. Monitor your trade using technical and fundamental analysis

When you trade gold, you’ll be using derivative products to speculate on the underlying market price – rather than ever buying or selling gold bullion or coins themselves.

There are multiple ways you can trade gold with us, including via futures, options, spot prices, stocks and ETFs. If you’re interested in investing in physical precious metals, check out crypto world.