On this page, you will learn how to trade gold online. First, we begin with factors affecting gold prices (XAUUSD). Then, we shall look at gold trading hours and the best way to invest in or trade gold. Finally, we shall also answer the questions asked by most beginners.
Most new gold investors start out asking, what time does the gold market open? The short answer is that the gold markets are open 24 hours a day, five days a week. A more detailed answer is that there are no gold trading hours because the yellow metal is not traded on a central exchange like stocks. The largest gold markets are the futures markets and the physical gold markets where traders buy gold bullion. You can access the futures markets via a broker to trade gold futures.
Therefore, as a trader, you should know that there is no gold market open time or a gold market close.
Traders have the opportunity to place and close gold trades at any time simply because the gold markets are open 24 hours, five days a week. However, there are better times to place trades compared to others. For example, some of the best gold trading hours are found during the European and American trading sessions, usually the market’s busiest hours. On the other hand, the Asian session is typically regarded as a much quieter session, given that only a small number of Asian exchanges are open at this time.
By trading gold during the busiest market hours, you will find plenty of trading opportunities compared to trading when the markets are tranquil.
If you are wondering, is gold a good investment now? The short answer is gold is still a good investment now and will likely continue to be a good investment in the foreseeable future.
Gold is still a good investment today because the yellow metal has intrinsic value, unlike some current investment fads such as meme stocks and cryptocurrencies. In addition, gold has long been regarded as a safe-haven asset, which retains its value when inflation erodes the value of other asset classes. Thus, while some might argue that gold prices have not risen much despite the rising global inflation, the metal remains a crucial component of most investors' portfolios.
If you are asking, should I buy gold now? Well, the answer is that it depends on your investment goals. If you want to hold gold for multiple years and benefit from rising gold prices, then you can expect average gains. However, if you want to profit from short-term swings in gold prices as a swing trader, you could make significant gains trading gold. But high returns also follow higher risk.
Beginner investors usually ask, is gold a safe investment? The answer is yes. Gold is one of the safest investments out there because it is a physical commodity market. However, it still sees large price swings, which, if managed well, can be used to produce above-average returns.
Nobody can predict the future with a high degree of accuracy, but given that gold has been used as a store of value for thousands of years. The commodity is still valuable today and is likely to remain valuable in future.
As you start to trade, you might wonder, how is gold priced? Well, the price of gold is primarily determined by the forces of supply and demand. Periods when demand for gold is high and the supply is low usually lead to higher gold prices. However, the opposite is true of periods when the supply of gold is high and the demand is low as prices tend to fall.
As a physical commodity, gold has actual uses, such as making jewelry and making electronics, as a form of money and investment purposes, hence why the forces of demand and supply determine the metal’s price.
Another critical factor that affects the price of gold is inflation, with most investors being aware of the gold price vs inflation debate. In theory, gold prices are expected to rise in tandem with inflation as investors stockpile the metal to hedge against the devaluation of fiat currencies.
Other factors that could cause gold prices to rise include political instability, quickly triggering a spike in gold prices. For example, the trade war between the United States and China was a massive boon for gold prices, which rose throughout 2019 and a considerable part of 2020.
Gold price fluctuations could also be driven by the accumulation of gold reserves by Central Banks globally as a hedge against inflation and prop up their currencies’ value. In addition, countries with volatile currencies have been stockpiling gold to stabilize the value of their local currencies.
Most Central Banks buy gold to diversify their treasury holdings from the typical foreign currencies they hold on behalf of their governments. Therefore, they are a vast source of gold demand after buying 650 tons of gold in 2020.
Over time, the overall gold price trend has been up, with the yellow metal currently trading above $1,700 compared to a mere $100, 50 years ago.
Investors wondering what causes gold prices to fall may be surprised to learn that gold prices typically fall during periods of economic and political stability. In such cases, most people do not feel the need to buy gold as a hedge against inflation, given the current stable economic and political environment.
The US dollar has a significant impact on the gold price, given that the two are categorized as safe-have assets and compete for investment capital. As a result, investors have to choose between investing in gold and the US dollar, depending on market conditions.
In most cases, investors will buy gold if the US dollar is falling to protect the value of their investments, given that a falling dollar usually coincides with rising inflation. Investors also tend to buy more dollars if the reserve currency rises, which typically coincides with falling gold prices.
Therefore, we can say that the US dollar and gold are opposites in that gold prices usually benefit from a fling dollar, while the dollar benefits from falling gold prices.
The weekly gold price chart above shows how gold prices rose from October 2018 to August 2020, marking a significant bull trend.
Trading as a beginner, you might be wondering how you can trade gold after hearing about its qualities as a safe-haven asset. You can trade or invest in gold using various methods, but the most common is not buying and selling physical gold but trading gold products online.
Buying and holding physical gold is a cumbersome process that requires you to store actual gold, which could put you at risk of being targeted. Therefore, for most investors, the best way to trade and invest in gold is via online instruments such as gold CFDs, stocks, and ETFs.
Gold CFD refers to tradable instruments offered by most Forex and CFD brokers that track the underlying prices of the yellow metal. Gold CFDs trading allow you to trade gold without buying an ounce of gold, which trades at over $1700. Instead, you can buy fractions of gold for a few dollars and try to profit from the constant changes in gold prices. You can also bet on falling gold prices without having to deposit vast amounts of capital and margin with a traditional broker.
As a trader, you might have heard of the term paper gold and may be wondering, what is paper gold? Paper gold refers to all the digital representations of gold traders by millions of investors from all over the world. For example, gold CFDs are paper gold, gold futures are paper gold, among others. However, gold stocks are not paper gold because they represent the shares of gold mining companies, not actual gold. Therefore, paper gold refers to instruments that track the actual price of physical gold.
So, how can you trade gold CFDs? The easiest way to trade gold CFDs is to open an account with a regulated broker that offers gold CFDs as a tradable asset. You should choose a licensed broker by a tier 1 regulator like the UK’s Financial Conduct Authority (FCA). Your chosen broker should offer fair spreads, fast execution speeds, and 24/5 customer support.
Some Forex brokers offer gold-stock CFDs for traders interested in trading gold stocks that allow you to bet on rising and falling gold prices readily. In addition, trading gold stocks as CFDs allow you to get started trading with minimal costs, compared to trading the actual gold stocks with a traditional stockbroker.
|Trading gold CFDs||Trading Physical Gold|
|1.It can be bought and sold quickly without requiring physical storage.||1.One must figure out how to store the physical gold due to security risks.|
|2.It can be traded in small quantities.||2.Must be bought in the form of physical gold bars or jewelry.|
|3.One can profit from rising and falling gold prices.||3.One can only profit from rising gold prices while booking losses as prices fall.|
Most trading beginners usually find themselves stuck figuring out how to buy and sell gold commodities online. This section shall detail how you can buy and sell gold on the popular MetaTrader 4 platform. We shall also briefly touch on becoming a successful gold trader. To get started, we shall look at the gold trading symbol. Most trading platforms will list gold under the ticker symbol XAUUSD, the price of gold quoted in US dollars. The symbol XAU stands for gold and is derived from its chemical formula AU, while USD stands for the US dollar.
Trading gold CFDs online will require you to open a trading account with a reputable CFDs broker. Once you have opened a brokerage account, you can deposit funds into the account and start trading gold CFDs.
The buttons at the top left corner represent the buy and sell buttons.
You can easily buy and sell gold CFDs on the ATFX MetaTrader 4 application by clicking on the above buttons. The process is quite simple as the chart is linked to your trading account and you will be trading your own funds if it's a live account, or virtual funds if it is a demo account. In between the buttons you choose the amount of gold that you would like to buy or sell. After the position is open you can place a protective stop-loss order, and a take profit order, so you leave the software to manage the position on your behalf.
Deep liquidity and high volatility means positions may be easily opened and plenty of opportunities abound whether gold’s price is rising or falling.
The precious metals market is open 23 hours a day, 5 days a week, making it an attractive market for traders looking for timing flexibility.
MetaTrader 4 (MT4) mobile and tablet trading apps give you the flexibility of taking your trading platform with you, no matter where you go in the world.
Tight competitive spreads – meaning you pay less to open a position.