Is it still worth it to trade gold?

Gold has been used as a medium of trade and a store of value for thousands of years, and trading gold in the 21st century is just as relevant as it’s always been. Gold remains a valuable store of value, with many investors using it as a hedge against financial crises, inflation, and geopolitical risks. As one of the largest and most liquid markets in the world, the gold market can offer traders plenty of opportunities. Prices can be volatile, but the market is rational, which makes trading gold an exciting endeavour.

Is gold the best precious metal to trade?

Gold is definitely the most popular metal for both investors and traders, but if you’re looking for a precious metal with a bit more “pop”, then silver is also a very good choice. That said, gold is often easier to forecast since it is primarily used as a safe haven asset and a store of value. Unlike silver and other precious metals, gold does not have any large-scale industrial use, so it has fewer factors impacting its movement. Plus, the huge liquidity makes the market accessible.

What is the best strategy for trading gold?

To trade gold successfully, there are many strategies that can work. Of course, if you can follow the professionals, the so-called “smart money”, you’re may have a better chance of success. One method they use is to focus on the seasonality of gold. Historically gold makes it strongest moves in September. It is also strong in the first two months of the year. So these are the best months to look for a long setup. Conversely, gold is usually weakest in March and October, making these good months to look for pullbacks in the market.

Gold Trading - Gold CFD Market

Gold Trading with CFDs at Friedberg Direct

In today’s markets it is possible to make profits from trading commodities, such as gold without having to physically own the metal. Gold trading via CFD’s is based on opening a temporary order to buy or sell an exact amount of gold. The profit or loss is determined by the change in the price of the gold metal during the contract’s duration.

EXCHANGE INFORMATION

MT4 Symbol – GOLD
Exchange – NYMEX
Trading Hours – 23:00 – 21:59
Increment: 0.01
Minimum Trade Size: 1 ounce

Gold Trading History

In prehistoric times gold was one of the first metals to be mined, mainly because of the form in which it was found, being nuggets or small pieces at the bottom of a river. It became so high in demand that Egyptians started mining it in 2000 BC. Throughout history, many civilizations chose gold as a reliable and universal exchange medium (money) for trading goods.

The gold standard – a monetary system in which a nation’s currency represents its gold reserves – came to exist due to the recognition of gold as an actual currency. It was abandoned by the United Kingdom and the whole British Empire at the onset of World War I. Most other countries also abandoned it during the 20^th century.

Start trading Gold with Friedberg Direct, and enjoy the benefits of trading with a regulated Canadian broker!

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How to trade gold

Open a trading account at Friedberg Direct
Fund your account to have a sufficient trading budget
Choose the desired position size
Open a Long (buy) or Short (sell) position according to your analysis

Different forms of gold available to traders and investors:

Physical metal (bullions or coins) – A bullion is a grouping or bulk of precious metal, measured in the form of a bar and weight.

Gold certificates – These are very similar to the first paper bank notes. First introduced in the 17^th century, these gold certificates acted as proof of gold ownership and were transferred as cash payments. Today they are still issued by certain banks and represent a quantity of gold bullion or coins for its owner.

Gold futures – These are contract agreements for the delivery of gold in the future at a set price. Investors use this to manage price risk. Since gold future contracts are traded at centralized exchanges, these contracts offer more leverage and flexibility than trading the physical commodities themselves.

Contracts for difference – suitable for traders but not investors, this derivative allows profiting from the changes in gold prices during the contract duration, without either a right or obligation to purchase the actual underlying asset. The nature of CFDs allows shorting gold and trading it on margin.

Why Trade Gold with Friedberg Direct

You can join Friedberg Direct today for as little as and start trading gold and other precious metals.

You will get access to a range of educational tools, trading advantages and benefits that are exclusive to Friedberg Direct clients.

We offer a range of platforms suitable for all level traders. You are guaranteed to find the trading environment that suits your style.

Gold Trading Online

Gold trading with Friedberg Direct is easy to understand, especially if you already have some experience of the forex market. Gold units are measured in Troy Ounces against a currency – usually the dollar – in a similar way to a Forex currency pair.

Gold Trading Influences and Gold Trading Strategy

Several distinct factors come into play when analysing the movement of Gold price:

Supply and demand – Most of the global demand comes from jewellery production and manufacturing (50%), and investment purposes (40%). Increased demand with low supply can mean a higher price; on the opposite end, an oversupply with weak demand can drive prices lower.
Market sentiment – Political uncertainty and/or instability contributes to global growth uncertainty and does help in the rising prices of gold.
Market volatility – Gold has often been used as a safe haven investment when markets are unpredictable.
Currency movements – The US dollar is a strong influencer. When the dollar falls, commodity prices around the world increase. The US dollar and gold have an inverse relationship.

Overall if you are looking to an alternative investment arena or a hedge, which is a reduced risk of price movements in any asset, then gold might be the right asset for you.
Please note that trading in this market involves risk like any other.

Here are a few tips for trading gold:

Gold is compared to the yen since both assets fall into the category of “safe haven assets”. They tend to move in the same direction. Often, you can check your trade set ups by comparing the two.
Focus on the price action and keep in mind that commodities can move more than currencies.
The most popular Gold exchange rate is the XAU to USD rate. XAU is the trading terminal’s code for gold.
Don’t forget to check out the CFD Rollover dates to know when the current contracts expire.

Are you ready to start trading gold today? Start trading the gold market with Friedberg Direct and enjoy competitive spreads and leverage as well as the benefits of trading with a Canadian regulated broker!

Create Account Or Continue with Demo

Gold Trading FAQs

Is it still worth it to trade gold?
Gold has been used as a medium of trade and a store of value for thousands of years, and trading gold in the 21st century is just as relevant as it’s always been. Gold remains a valuable store of value, with many investors using it as a hedge against financial crises, inflation, and geopolitical risks. As one of the largest and most liquid markets in the world, the gold market can offer traders plenty of opportunities. Prices can be volatile, but the market is rational, which makes trading gold an exciting endeavour.
Is gold the best precious metal to trade?
Gold is definitely the most popular metal for both investors and traders, but if you’re looking for a precious metal with a bit more “pop”, then silver is also a very good choice. That said, gold is often easier to forecast since it is primarily used as a safe haven asset and a store of value. Unlike silver and other precious metals, gold does not have any large-scale industrial use, so it has fewer factors impacting its movement. Plus, the huge liquidity makes the market accessible.
What is the best strategy for trading gold?
To trade gold successfully, there are many strategies that can work. Of course, if you can follow the professionals, the so-called “smart money”, you’re may have a better chance of success. One method they use is to focus on the seasonality of gold. Historically gold makes it strongest moves in September. It is also strong in the first two months of the year. So these are the best months to look for a long setup. Conversely, gold is usually weakest in March and October, making these good months to look for pullbacks in the market.

These FAQs, comments/analysis do not take into consideration your individual personal circumstances and trading objectives. Therefore, they should not be considered as a personal recommendation or investment advice. They are intended for educational purposes only. Past performance is not indicative of future results. There is no guarantee that the contents or instructions will result in profits or not result in losses.