In the last three decades, Gold prices have increased by over 360% From Australia to China, India and the US, Gold holds value across the globe and reaps profit in almost all economic situations. This is exactly why day trading Gold has become a popular choice for many traders.
Gold trading is one of the most attractive trading opportunities because of the market’s volatility. Since Gold is incredibly liquid and holds great value as an investment purpose, it is also regarded as a safe haven by many traders. If you’ve been planning to start trading Gold, day trading may be a good place to start.
What is Gold trading?
With Gold trading, you speculate the rise and fall of its price. You can trade the market with options, futures, CFDs, spot prices, and exchange-traded funds, also known as ETFs.
Trading Gold does not necessarily mean you will be handed over Gold coins or bars. Rather, it is an electronic transfer of funds according to the buying and selling prices of Gold. The prices are determined by the supply and demand of the prevailing assets, which in this case, is Gold. When you trade Gold, you take a position in the asset’s rising or falling prices. This means that you do not directly own the asset, but you trade its price to potentially realise profits.
For example, trading Gold CFDs involves receiving a contract with the opening price and depositing only a margin of the total asset price. If we assume the margin to be 10% and the asset price to be $1,800 per ounce, you only need to deposit $180.
Let’s say, in the next few hours, the price increases to $2,000 per ounce, and you decide to sell at the given price by exchanging the difference between the opening and closing price of your position. With this, you earn a profit of $200 per ounce of Gold sold by only depositing $180.
How to trade Gold
Step 1: Create a trading account
Start by signing up for a live account and get ready to trade either Gold CFDs within minutes. You can also create a risk-free demo account that functions similar to a live account but protects you against any possible losses by only trading virtual funds worth up to $50,000. Demo accounts help build up your confidence and Gold trading knowledge before you begin to trade in the live market.
Blueberry Markets helps you benefit from the increasing Gold prices without actually purchasing it as an asset. On our platform, Gold is traded against the US Dollar in the futures market through CFDs. This means that you do not have to buy actual Gold bars to start investing and trading.
Step 2: Choose the Gold market you want to trade in
You can choose among several types of Gold markets and trade wherever suits your requirements best. You can also begin doing so by getting technical and fundamental analyses, discovering Gold price trends, and updating yourself with trading alerts and signals through our weekly newsletter.
Here are some of the markets you can choose from:
- Gold spot market: In a spot market, you can trade Gold with its exact value at that moment in time. This means you trade on the spot without having to wait for a future date.
- Gold futures market: Unlike the spot market, futures contracts come with an expiration date. This is the most popular way to trade Gold long-term as it allows you to benefit from the increasing prices over time. With this market, you buy Gold with a contract that expires on a specific day and sell it either on or before the due date.
- Gold exchange-traded funds and stocks: You can buy stocks of companies involved in Gold mining, as their prices are also directly related to Gold prices. You can also have a larger exposure to the Gold market through ETFs. ETFs are traded like stocks but take their underlying price from several Gold stocks and the asset itself.
Step 3: Open your first Gold trade
Start by deciding on the trade position size, considering your risks, and planning your entry and exit strategies. Once you’ve got those settled, open your trade and acquire Gold CFDs at the current market price.
Once done, two situations may occur:
- If you expect prices to increase, you may choose to hold onto the position until it reaches your target price; or
- If you feel like the market will crash, you may choose to exit your position or choose to go short, so you may profit from the market dips.
However, it should be noted that Gold prices seem to hardly ever crash and have mostly witnessed an upward direction over the years.
Step 4: Monitor your trade and exit as you see fit
Once you’ve placed your trade, you need to monitor and analyse it regularly. All the market movements, trends, and any major economic announcement can affect Gold prices.
For example, let’s say you buy 1 ounce of Gold at $1,800 today. By the end of the day, a big bank decides to increase its Gold reserves. Due to the increased demand and low supply, the Gold prices rose to $2,800. Given the situation, you have the option to go short and potentially benefit from the $1,000 profit from your ounce of Gold.
Start trading Gold CFDs today
Gold has always maintained its value over time and has proven to be a precious asset. It has also served as a significant hedge against inflation and economic downturns. This not only makes it a good trading asset but also a wise investment decision.
However, every type of trading comes with its own sets of risks. This is why we recommend you to start trading Gold CFDs with a demo account first before moving onto live trading.
Blueberry Markets offers a risk-free demo account to help you understand how the live market works without having to take real monetary risks. Once you are ready, you can sign up for a live account to start day trading real Gold CFDs.