Gold is one of the most sought-after metals among the available precious metals, which has been the case throughout the ages. Gold’s appeal to traders and investors is driven primarily by its characteristic as an asset that can be used to preserve value. Most traders and investors globally have embraced gold trading as a highly profitable strategy, especially since the metal is considered very safe, especially in volatile political and economic conditions. But how can you trade gold as a new investor or trader?

 

Trading gold through CFDs is one of the most popular ways to buy and sell the asset used by investors worldwide. You can profit from both positive and negative changes in gold prices using CFDs, making it easy to trade in both directions. Investors can bet on rising and falling gold prices using CFDs despite the metal being regarded as a safe-haven asset. Trading gold CFDs is much better than trading the physical metal itself.

 

 

Factors that affect gold prices

 

The US dollar: The dollar is one of the main factors affecting gold prices globally, given that the two instruments are both considered safe-haven assets.

 

Political and economic conditions: The political and economic conditions affect gold prices within the global markets. The publication of negative economic and political news typically has a positive impact on gold prices as investors flock to the safe-haven asset. In contrast, a stable economic and political environment usually reduces the demand for gold.

 

Central banks: Changes in interest rates set by central banks also significantly impact gold prices. Higher interest rates usually drive investments into bonds and away from gold, which does not bear interest. Lower interest rates make gold more attractive because it preserves its value better than currencies.

 

Supply and demand: The price of gold is greatly affected by the supply and demand for the metal. An increase in the gold supply usually triggers lower prices, especially if the demand is lower. A decline in gold supplies than demand typically leads to higher gold prices, especially if there is a high demand for gold.

 

Inflation rate: High inflation rates usually increase gold prices as investors flock to the metal as a store of value to preserve their valuable investments. High inflation rates typically lead to the affected currencies losing value, making gold an attractive alternative store of value.

 

So, when deciding to start trading and investing in gold within the global markets, you must follow some steps to trade safely and increase your chances of success. The first step is to choose a trading strategy that corresponds with your trading account size. Always choose a strategy with an excellent risk: reward ratio to ensure that your profits are greater than your losses. Keep track of market events, news and economic releases which could affect gold prices to exploit the opportunities created by such events. Always track the US dollar’s movements given the significant impact it has on gold prices. Doing the above will help you anticipate future gold prices and execute the right trades while avoiding losses.
 

 

Types of gold investments

 

There are different ways to invest in gold, the first of which is online trading of gold CFDs via forex platforms, where the trader or investor opens a trading account with a brokerage firm allowing them to trade gold, other precious metals, currencies, among others.

 

The second way to invest in gold is by buying physical gold bars. You can do this via reputable websites such as JM Bullion and APMEX then have the gold bars shipped to your home address. 

 

Thirdly, you can invest in gold by buying stocks, that is, acquiring the shares of companies that mine gold, which is an indirect investment in gold. Buying shares means that you are also exposed to other risks such as the company going bankrupt or making losses on its operations.

 

 

Ways to invest in gold

 

The traditional way: The traditional way to invest in gold is to buy gold bullion. You can buy gold bullion depending on the amount you are willing to invest, which will determine the weight of the gold you buy.

 

Investment Fund: Investment funds are more flexible and are traded on global stock exchanges. You can buy shares in a fund that invests in gold and benefit from your investment being managed by professionals.

 

Gold coins: They are rare to find and are often sold at a value higher than the price of physical gold making them quite expensive.

 

Contracts for Difference: CFDs allow you to buy and sell gold in an intangible way and eliminate the risks associated with storing physical gold.

 

Gold Deposit Certificates: Are an alternative to real gold and enable the investor to buy and sell gold at its daily rate.

 

Therefore, although gold is considered one of the safest assets in times of crises, appropriate strategies and plans must be applied to ensure profits and limit losses. Keeping track of global economic news on an ongoing basis as their effect on gold prices allows you to predict future gold prices and remain profitable.

 

• AT Global Markets (UK) Ltd is authorized and regulated by the Financial Conduct Authority (FCA) in the United Kingdom with registration number 760555. The Registered Office: 1st Floor, 32 Cornhill, London EC3V 3SG, United Kingdom.
• AT Global Markets LLC is a Limited Liability Company in Saint Vincent and the Grenadines with company number 333 LLC 2020. The Registered Office: 1st Floor, First St. Vincent Bank Bldg, James Street, Kingstown, St. Vincent and the Grenadines.
• ATFX Global Markets (CY) Ltd is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) under the license no. 285/15. The Registered Office: 159 Leontiou A' Street, Maryvonne Building Office 204, 3022, Limassol, Cyprus.
• AT Global Markets Intl Ltd is authorized and regulated by the Financial Services Commission with license Number C118023331. The Registered Office: Suite 207, 2nd Floor, The Catalyst, Silicon Avenue, 40 Cybercity, 72201 Ebène, Republic of Mauritius.