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GOLD TRADING

Gold is a highly liquid yet scarce asset, known as the most popular commodity and a safe haven for traders. Gold has been traded for centuries with it's unique physical nature, from being used in jewellery to being high in demand across the technology sector for key components in electronics. The value of Gold Today, gold is used as jewellery, an investment or even in industries like medicine and electronics. However, for a long time, the precious metal has been used as currency. But what makes gold so special? Why is, for example, Silver or Palladium not the most popular precious metal? Gold has always been seen as attractive in colour and brightness (its unique shine), and it is almost indestructible as well. Gold is rare enough to avoid producers flooding the market with it and bringing down its value, but abundant enough to keep the market liquid. Humans also have an emotional connection to gold, and it remains important in many cultures today. What is gold trading? Gold is one of the world’s oldest and most trusted forms of currency. For traders, gold's intrinsic value – or “safe haven” appeal – makes it a popular investment and a great way to diversify a portfolio. There are two main ways to invest in gold. The first is buying physical gold, or shares in a mutual or exchange-traded fund that follows the real-time price of gold. The second is to take advantage of price fluctuations in the commodity trading market and trade derivatives linked to gold, such as futures, CFDs, options and more. Two of the most popular gold derivatives are gold CFDs and gold futures. Gold bars How does the gold market work? Gold is primarily traded over-the-counter (OTC) and on exchanges. London is the global centre for the OTC market, where market participants trade directly with each other. While this market is less regulated and has a higher degree of flexibility, the counter party risk is higher. Exchanges are regulated platforms and trading is centralised. They usually offer a standardised contract, which will not suit every trader, as it limits their flexibility. Aside from London, the other two major gold trading centres are New York City and Shanghai. The COMEX exchange is located in NYC, while the Shanghai Gold Exchange is located in Shanghai. How do you trade gold for beginners? For beginner traders looking to buy and sell gold as a regular asset in their portfolio, different gold trading strategies and assets will be needed. Read through this section to learn the basics steps to start trading gold.

Find a suitable broker - Gold is available on most trading platforms. GST offers a variety of trading instruments, which means traders can trade currencies, metals, stocks, crypto and commodities all in one place. Simple sign up for a live trading account. If traders wish to keep their gold trading on a separate trading account, they will always have the option to create a sub-account where they could only trade Gold.
Choose which way you want to trade gold - Before traders start trading gold, it is important that they understand the differences between the two gold products offered as CFDs. The spot CFD generally has a lower spread than the futures CFD, but is subject to a daily swap charge. The futures CFD has a higher spread than the spot CFD, but no daily swaps are charged (instead, a rollover will apply upon expiry of the futures contract).
Start testing a trading strategy by trading gold - Traders might prefer to do this initially on a demo account. This is an important step as it will give them insights whether their strategy is compatible with gold or not. If they are using fundamental analysis, they should follow news & events that are relevant to gold, and learn about the correlation of the precious metals to other asset classes.

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