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How to trade Gold
- Trading Education
- How to trade Gold
Highly valued since ancient times, precious metals, and gold in particular, have always been associated with monetary wealth.
In the financial markets, precious metals and especially gold investments tend to hold their value over long periods of time. Thus they provide a long-term safe haven for commodity traders.
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Why Trade Gold?
What Affects the Price of Gold?
How to Invest in Gold?
When to trade Gold?
What Trading Platform to Use?
HOW TO TRADE GOLD IN JUST 3 STEPS
Sign up
Register with HFM by completing a simple online form and providing your KYC documentation to verify your account.
Fund your account
Fund your account using any one of our fast, simple and secure methods.
Start gold trading
That’s it! You can access all asset classes and start gold trading.
or try a Free Demo Account
WHY TRADE GOLD?
WHY TRADE GOLD?
Investment in gold and other precious metals can be an important part of a diversified long-term investment portfolio.
The timeless appeal of gold and precious metals has created a safe-haven and can make investing in gold a useful risk management tool.
Precious metals have an intrinsic value with their price generally inversely related to the value of the US Dollar. The USD is the benchmark pricing mechanism for commodities, and the reserve currency of the world.
Gold's value can be stored in real terms amidst economic volatility and provide a hedge against rising costs of living. Gold is mined and traded globally, providing international liquidity on precious metals trading.
WHAT AFFECTS THE PRICE OF GOLD?
There are many factors that influence gold’s perceived value other than the broader economy and gold’s uses as a material.
Some important factors that can drive the global gold trading price include:
Supply and Demand
With the increase of demand, metal prices rise whereas when the demand is weak the value of precious metals declines.
Value of the US Dollar
As the precious metals are dollar-denominated their price is generally inversely related to the value of the US Dollar.
Value of US Government Treasury Yields
Gold is non-yielding investment so as government and corporate yields rise the price of gold investments tends to fall and vice versa.
Seasonality
Gold tends to post seasonal lows towards the end of the second quarter in late June or early July and then rallies during the third quarter as investor demand increases, peaking towards year-end and into the new year.
Inflation
Inflation has a direct effect on the price of precious metals. Gold is traditionally bought or traded by investors as hedge against inflation; so as inflation rises the price of gold rises, as inflation falls the price of gold tends to fall.
Industrial demand
Technological and industrial uses for gold, such as the demand for jewelry and electronics, can make the price of precious metals rise.
Are People Buying or Selling Gold Right Now?
HOW TO INVEST IN GOLD
There are a number of different ways to invest in gold, and each trader must find the method that best suits them. Some examples of gold trading strategies include:
Invest in gold by buying gold bullion, coins, bars and jewelry and lock it away in a vault or safe-deposit box for a “rainy day”. Alternatively invest in gold spot contracts, ETFs, and gold mining company stocks.
Gold Bullion and Jewels
By purchasing gold in the form of bars, bullion, coins or as jewelry, it is mainly used as a store of value. Due to its high price, however, it’s crucial that it is purchased from a reputable dealer, that it’s insured and well protected in a vault or safe deposit box. This all has storage and insurance costs, which in addition to the relatively large markup from the dealer impacts profit potential. In the case of gold jewelry and coins there are also the risks that they will be inauthentic or in bad condition.
Gold Futures and Spot
Gold Futures are contracts that enable you to exchange gold for a fixed price, quality and quantity on a particular date in the future. There is a physical or cash settlement at the end of the deal. Spot contracts enable you to buy or sell at the current market price. Trading spot gold is a popular means of getting exposure to gold without having to take ownership of the precious metal. XAUUSD and XAUEUR are available for trading spot contracts with HFM.
Gold ETFs
Another alternative to gold investment is by investing in gold related Exchange Traded Funds (ETFs). Trading or investing in an ETF offers investors an innovative, relatively cost efficient and secure way to access thegoldmarket, which makes them a popular way of diversifying a portfolio. At HFM we offer the SPDR Gold Shares ETF and SPDR S&P Metals & Mining ETF.
Gold Mining Stocks
Gold is mined globally: the 5 largest producers are China, Russia, Australia, the USA and Canada, with China producing as much as the USA and Canada combined. The largest Gold mining companies outside of China are also equally distributed. The two largest, America’s Newmont and Canada’s Barrick Gold, are available to invest in as CFDs with us.
WHEN TO TRADE GOLD
The below table sets out the Trading Hours that Gold is available to be traded on the HFM platforms. Although Gold, like the rest of the forex market, is tradable 24/5, it is traded the most during the London trading session (08:00-18:00 GMT), since these are the most active trading hours for gold, as seen by the usually high trading volume.
| XAUEUR |
|---|
| Description: Gold/Euro |
| Spreads as low as: 0.26 |
| Leverage (up to): 1:2000 |
| Monday Open: 1:05:00 |
| Friday Close: 23:57:59 |
| Break: 23:57:59 - 01:05:00 |
| XAUUSD |
|---|
| Description: Gold/US Dollar |
| Spreads as low as: 0.25 |
| Leverage (up to): 1:2000 |
| Monday Open: 1:05:00 |
| Friday Close: 23:57:59 |
| Break: 23:57:59 - 01:05:00 |
WHAT PLATFORMS CAN I USE TO TRADE GOLD?
Gold can be traded on all our platforms, the HFM platform, MetaTrader 4 and MetaTrader 5! These popular and powerful platforms ensure that every trader can trade in their preferred style, in their favourite location and on the device of their choice. Trade Gold from your device, anytime from anywhere, with the HFM platform!
or try a Free Demo Account
FAQs
You can start Gold trading with HFM in less than 2 minutes! Open a live trading account by completing a simple online form and providing your profile information, fund your trading account using any one of our fast, simple and secure methods, and access any of our many asset classes to get started!
HFM offers account types with no minimum deposit. We also offer a maximum leverage of 1:2000 and swap free trading as well as low spreads, negative balance protection and ultra-fast execution. Please check our Trading Accounts Page for more information.
Although Gold, like the rest of the forex market, is tradable 24/5, it is traded the most during the London trading session (08:00-18:00 GMT), since these are the most active trading hours for gold, as seen by the usually high trading volume.
Gold can be traded on all our MT4 and MT5 platforms on desktop, Android and iOS, as well as the HFM Platform for on the go trading via the HFM App! These popular and powerful platforms ensure that every trader can trade in their preferred style, in their favourite location and on the device of their choice.
Investment in Gold and other precious metals can be an important part of a diversified long-term investment portfolio. The timeless appeal of Gold and precious metals has created a safe-haven status and can make investing in gold a useful risk management tool.
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