Trading Spot Gold – Everything You Need to Know
Royalty, wealth creation and abundance are all visuals strongly associated with the most impressive precious metal of them all, Spot Gold. As a result, trading Gold has a very high appeal among those looking to accumulate wealth and achieve their financial goals.
People have fought wars over Gold and speculation on the price of Gold has never been stronger. With the most powerful countries in the world threatening to bomb other countries, the accumulation of physical Gold is continuing to rise as a safe haven play.
Many people often ask. What is the number one way to benefit from the rise and fall of the price of Gold? Today we’ll take a look at how trading Spot Gold CFDs is considered the most effective way to trade Gold.
Why Trade Spot Gold using CFDs?
If you wanted to invest in spot gold in days gone by, you would have had to have purchased the physical asset itself, i.e. a bar of gold, for the going rate. However, in today’s markets, it is possible to speculate on the price movement of spot gold without having to physically own the precious metal.
Trading spot gold via a CFD trading platform is one such way to speculate on its price movement and by using a CFD broker to trade, you’d enjoy the following benefits;
- Go Long or Short: trade whichever way you think the price of gold will go
- Wide Range of Markets: trade thousands of the world’s financial markets, including gold, all from one trading platform
- Leveraged Trading: make larger trades with leverage
History of Gold
Gold is a hard commodity, i.e. one that is mined from the earth and has been around since the prehistoric days where it was one of the first metals to be mined. History tells us that gold was in such high demand, that the Egyptians started mining it over 2,000 years ago!
Since then, gold has always be considered a reliable and global means of exchange. It is also considered a safe haven asset which means that when there is uncertainty in the financial markets and investors do not trust other asset classes, they will buy gold.
Best Way to Trade Gold CFDs
Short term traders benefit most during fast moving markets and gold has historically moved more than $25 per day (more than 2%), which represents a lot of opportunity for traders.
One thing you will notice about Gold is it performs very well around key technical levels. What you need to look out for is the break of key support levels as this is when Gold seems to have the highest average daily movements (as noted in the ATR indicator).
Focus on the price behavior of gold and keep in mind that commodities can often move more than currency pairs.