HOME > CFD Products > Precious Metals > How To Trade Gold: A Beginner’s Guide
How To Trade Gold: A Beginner’s Guide
Gold trading is one of the oldest forms of investment. People have used this precious metal to store value for thousands of years. Now, gold is one of the most widely traded commodities.
Gold is unique because it can serve as a commodity for speculation, a hedge against volatility and inflation, and a long-term investment for people who want something that can store value for decades with limited risk.
Many investors treat gold as a safe haven investment when markets are volatile or experiencing significant downturns. This reduces their risk and exposure to potential losses.
Here is a look at how to trade gold using CFDs.
There are several different ways to access gold markets.
A gold futures contract is an agreement to buy or sell gold at a specific price on a future date. These are available through some brokerage accounts and require more capital than CFDs.
Gold spot markets allow you to trade like a currency pair. The most popular gold market is XAU/USD, which tracks gold prices as they relate to the US dollar.
Some investors choose a gold trading strategy that involves purchasing ETFs. Investing in an ETF that tracks gold prices offers greater diversification than a single stock.
CFDs closely track the spot market, giving you the same exposure as you’d get trading XAU/USD but with lower capital requirements and the ability to trade using leverage. If you can learn how to trade gold in forex markets using CFDs, you can access gold with limited capital.
How to trade gold successfully
CFDs provide the most accessible option for gold trading investors. If you trade metal CFDs, like the ones offered at J&J PARTNERS, you can accurately track the gold spot market.
Several factors also affect the gold market, which you will need to be aware of before implementing your gold trading strategy. Ask yourself:
Investors should always seek an ASIC-accredited and regulated brokerage for gold trading like J&J PARTNERS. Visit our site to open a gold trading account, or contact us 24/7 with questions or concerns.
How much money do you need to trade gold?
If you wish to trade gold futures or spot gold, you will need a great deal of capital. However, you can get started with a more modest deposit with J&J PARTNERS if you trade gold CFDs. CFD brokers, like J&J PARTNERS, allow you to use leverage to increase your position size without committing to the upfront cost.
On J&J PARTNERS, we offer a leverage ratio of up to 1:400 for precious metals. With 1:400 leverage, you can control $400 for every dollar of your own capital. You can potentially open a $40,000 position with a $100 deposit.
What is the best time to trade gold?
The best time to trade gold depends on your strategy. Longer-term strategies involve purchasing gold when you see indicators of economic upheaval, inflation, and other factors. You’ll want to open your position before the markets start reacting to these factors by initiating your trade as soon as possible.
Short-term strategies involve trading during market hours of major economies. Typically, the biggest movements in price happen within the hour or so after the market opens.
Frequently Ask Question
No posts yet.