Trading In Gold
Trade in Gold
Learn what gold investing and trading is
Gold investing and trading are two different ways to take a position on the future price
movement of gold markets.
When you invest in gold, you’d take ownership of the asset upfront and profit if the precious
metal rises in price. When you trade gold, you’re taking a position on the underlying price
rising or falling – meaning you won’t be taking ownership of the asset itself.
There are several types of gold assets available for you to trade or invest in, depending on
whether your interest is in the physical asset or not. These include:
Physical gold – in the form of coins and bars – is commonly used as a store of value, for
both individual investors and banks. But the expensive safekeeping and insurance
requirements often deter more active investors from buying the metal outright
The spot price of gold is how much it would cost to buy upfront – or on the spot. It is usually
the price of one troy ounce of gold. Trading spot gold is a popular means of getting exposure
to bullion without having to take ownership of the precious metal
Futures contracts enable you to exchange gold for a fixed price on a set date in the future.
You’d have the obligation to uphold your end of the deal, whether that’s through a physical
or cash settlement. Futures contracts are standardised for quantity and quality – only their
price is driven by market forces
Options contracts work in a similar way to futures, but with no obligation to execute the trade when
buying. Options give you the right to exchange either physical gold or gold futures at a specific price
on a specific date. Call options give the holder the right to buy the precious metal, while put options
give the holder the right to sell it
Exchange traded funds (ETFs) track the movement of a basket of shares of publicly traded
gold mining, refining and production companies. Trading or investing in an ETF gives you
much wider exposure than you’d get from a single position, which makes them a popular
way of diversifying a portfolio. ETFs are passive investments, which replicate market returns
rather than seeking to outperform them
Trading on or investing in stocks can be a great way to get indirect exposure to gold. You can gain
exposure to every element of the gold industry, from mining and production to funding and sales.
It’s important to note that gold stocks don’t always move in the same way as bullion, as there are a
lot of other factors that drive the prices of shares.
Understand what moves the price of gold
The price of gold is determined by supply and demand. There are a huge range of factors
that can impact the market price, including:
The US dollar
Financial stress and political insecuritySince the 1970s, the demand for gold has quadrupled every year – driving up the gold price.
Gold is used all over the world for a variety of reasons, such as jewellery, technology and as
a value store for central banks and investors. In fact, jewellery demand accounts for roughly
50% of the global demand, while 29% comes from exchange traded funds (ETFs).1
A large portion of gold demand comes from middle-class expansion in India, China and
Gold as a safe haven
Investors tend to rely heavily on gold in times of political or economic uncertainty, and the
metal is often used as a hedging tool against inflation or currency devaluation.
For example, gold increased more than 13% between January and May 2020 during the
Covid-19 crisis, due to rising market volatility. Investors started pulling money from cash
assets in favour of the precious metal in order to combat the political, economic and social
However, when any investment becomes too popular there’s the risk of a price bubble being
created, which could send prices spiralling when it bursts. For this reason, many gold traders
choose to diversify into other markets or manage their risk with stop-losses.
Trading vs investing in gold
You might want to trade gold if:
You want to speculate on the price of gold rising or falling
You want to leverage your exposure
You want to take shorter-term positions on gold
You want to hedge your portfolio
You want to trade without owning the underlying asset
You might want to invest in gold if:
You’re interested in buying and selling gold stocks and ETFs
You’re focused on longer-term growth
You want to build a diversified portfolio
You want to take ownership of the underlying asset
You want to gain voting rights and dividends (if paid)
Find out more about CFD trading
Create your gold trading CFD account
Start trading in gold by filling out our online form – you could be ready to trade CFDs.
If you’re not ready to trade live gold markets, you can build up your confidence in a
risk-free environment by creating a demo account.
Receive actionable ‘buy’ and ‘sell’ signals on gold markets
Open your first trade
There are a variety of gold markets you can trade with us, including our proprietary
spot prices, futures contracts and options. Alternatively, you could get indirect
exposure to gold via company stocks and ETFs.
Whichever gold market you decide to trade, it’s important to think about whether
you’ll go long or short, what position size you’ll take and how you will manage your
risk. We offer a range of solutions for risk management, including stop-losses and
limit-close orders – these are used to close trades at predetermined levels of loss
and profit respectively.
Gold stocks and ETFs
Our gold spot prices are based on the price of the two nearest futures. They’re useful
for taking shorter-term positions as there are no-fixed expiries. Plus, you can perform
technical analysis over a longer timeframe, as you’ll get continuous pricing across
the market’s entire history – rather than just the duration of a single future.
Once you’ve created your account and logged in, you can trade gold spot prices by:
1. Searching for gold or finding it under ‘commodities’ in the left-hand menu
2. Selecting ‘spot’ at the top of the deal ticket in the right-hand panel3. Choosing your trade size
4. Opening your position by clicking ‘buy’ or ‘sell’
Learn more about commodities trading
Choose whether to go long or short on gold
When you start trading gold or gold-linked assets via CFDs, you’ll be able to choose
between buying and selling the market – also known as going long or short. You’d
buy if you expected the asset’s price to rise in a given timeframe, and you’d sell if
you thought its price was going to decline.
To understand which way the market is likely to move, it’s important to do thorough
research – both technical and fundamental.
Monitor your trade and close your position
Once you’ve opened your position, you can monitor your profit and loss in the
‘positions’ section of our platform.
While your position is open, you should keep up to date with news and continue
performing technical analysis so that you can identify key turning points in the
Ready to open your first trade? Create an account now
When you decide it’s time to close your position, you can click ‘close’.