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Best Gold Trading Brokers

From being used in jewellery and investment to being at a premium in the technology sector, gold is an asset many investors regard as a safe haven. Gold is a precious metal that plays a crucial role in the world economy, and because of its high liquidity, it is among the commodities that enjoy great interest from traders.

Gold trading is all about speculating on the price of the global market in an attempt to make a profit. This can be done via exchange-traded funds, spot prices, futures, and options. Successfully trading with gold involves correctly predicting the direction in which the market will move in rather than going out of your way to buy low and sell high.

How Gold Trading Works for Traders and Brokers

gold tradingTrading gold and other metals has a lot in common with forex currency trading, and it is all about buying or selling a number of units of a specific commodity against the US dollar. Gold, and metals in general, provide a low or negative correlation to other asset classes, and for this reason, traders tend to add them to their portfolios whenever they are looking to cut down the risk.

There are several reasons why such a significant share of the traders are keen on trading and investing in gold, and first and foremost, they go for it because it is a great way to hedge against inflation. The precious metal is so preferred also because it allows traders to diversify their portfolios.

Gold markets are exceptionally volatile, but having proper knowledge of the factors that can have an impact on the prices of the precious metal undoubtedly helps mitigate the risk.

  • Inflation and interest rates
  • Physical demand
  • Investment demand
  • Mining output
  • US dollar value – gold prices move in the opposite direction of the dollar

Because of the considerable price fluctuation, gold trading requires careful consideration. Back in 1971, the gold standard for the US dollar was removed. As a result, gold’s prices go up and down, influenced by various macroeconomic factors.

It is easy to see why the market remains liquid as gold is rare enough to guarantee that the market will not be flooded, which will drive down its price. At the same time, it is widely available to maintain the liquidity of the market.

Gold is easily the most traded commodity on a global scale, and depending on their portfolio composition and investing strategy, investors are given a choice of several ways in which they can invest or trade with it. It is up to traders to decide whether they prefer to focus on physical gold, shares in a mutual or exchange-traded fund, or whether they would rather use derivatives.

When gold futures are concerned, traders go for such opportunities when they think that the gold’s price will become higher in the future. Because of this, investors will strike a deal with the seller about the price they need to pay now. Thus, traders will be allowed to sell the trading instrument they have bought earlier at a higher price than the one they agreed upon as soon as the contract expires.

Gold CFDs

Alternatively, if investors want to avoid buying physical gold, they can go for CFDs. The CFD or contract for difference makes it possible for traders to make the most out of gold’s price movements without possessing that underlying asset after they strike a deal with the seller. It is important to note, however, that the value of the CFD does not take into account gold’s underlying value. What changes between the trade entry and the exit is the price.

Gold ETFs

Gold exchange-traded funds or gold ETFs are another option traders have, and once again, they will not be required to buy the physical underlying asset. In simple terms, it works in a way, which is exceptionally close to the way stock trading works.

Gold Stocks

Investing in the stocks of the mining companies is yet another option you will have when you want to trade gold. When investing in gold stocks, traders will not focus on an asset that is linked directly to the precious metal’s price.

Gold Options

Trading options are an alternative to buying or selling gold or futures contracts, and they can be either puts or calls. When puts are concerned, they allow traders to sell gold at a specified price on the expiration date, while calls make it possible for traders to buy gold at a specific price, at the time when the contract expires.

Brokers make their money mainly through spreads that are wrapped around the market prices. Thus, traders should know that the price of the offered trade will always be factored into the buy and sell prices. Brokers collect some of their income through fees, and such might be charged for account inactivity, for example.

Top 10 Gold Trading Brokers

choosing a brokerGold is a highly tradable precious metal, and it occupies the role of money proxy and the oldest currency. Gold trading offers vast investment opportunities and high liquidity, but because of its unpredictable nature, traders should have a thorough understanding of the investment commodity. While gold is appearing on the portfolios of more and more brokers, traders must examine the alternatives to trade and the trading conditions before they create an account. When choosing a good gold broker, traders should have the full confidence that they are dealing with a reputable broker that offers an account type that measures up to their trading needs and requirements.

Related Topics


1. How much do I need to start trading gold

The amount traders will be required to add to their balance varies between the different gold trading platforms. In spite of the fact that some brokers allow for smaller deposits, traders should remember that sometimes, they need to make a larger deposit in order to benefit from more trading options.

2. What gold trading strategies can traders use

Traders need to know that there is no fool-proof strategy they can use when trading gold or any other instrument. It is up to traders to develop their own strategy that reflects their abilities and the goals they have set. Some of the most commonly used gold trading styles include day trading, scalping, swing trading, and position trading.

3. Is gold trading profitable

As is the case with any other asset class, trading gold can be profitable, provided that you use the right trade management and risk practices. Keep in mind that in order to make the most out of the gold price movements, traders should pay close attention to all the external factors that have an impact on its price, as well as on volatility.

4. Is it possible to trade gold on MT4

Most of the time, traders can use the MT4 to trade gold or any other instrument or asset in a breeze. Entering and exiting the market is normally quite easy, and is virtually identical to trading currencies. What traders should look into before they start using the MT4 are the account types they can decide between.

5. What are the gold market trading hours

The regular gold trading hours depend on whether traders will opt for options prices, futures, or spots.