October 18, 2018

How to invest in "Gold" online with low cost and high leverage

How to start your Gold online trading smartly?

invest-in-gold-precious-metal-online invest-in-gold-precious-metal-online

Why don’t you invest in Gold online instead of buying from shops which involves more cost and time?

Invest in Gold Online

Does Gold price change?

Today, like most commodities, the price of gold is driven by supply and demand including demand for speculation.

However, unlike most other commodities, saving and disposal plays a large role in affecting its price than its consumption.

Most of the gold ever mined still exists and accessible form such as bullying and mass produced jewelry.

With little value over it’s fine weight and is that’s potentially able to come back onto the gold market for the right price.

Want to invest in Gold online?

Do you think gold prices will go up further?

Are you sure that crude oil prices are going to fall?

Have you heard that the soil crop this year is bad and may result in soil prices going up?

If you believe that these predictions have a good chance of coming true, and are willing to bet some money on them, you could try your hand at playing the commodity futures market.

In today’s market, commodities and raw materials are traded including metals such as gold silver and iron and agricultural products such as corn, coffee, rice and wheat.

First thing you need to do is, find your broker to trade with.

List of Online Gold Brokers

How do I invest in Gold? What options are there?

Let’s suppose you want to buy gold because you believe that the price of gold will rise.

You could buy gold ingots, store them, wait for them to go up in price and then sell them at a profit.

But you have to be sure that the gold you buy is pure, you have to find a place to store it, you have to provide a security transport it to the Vault and other such hustles.

A far better way to invest in gold would be to buy gold futures from the commodities exchange.

How do you do that?

When you buy gold futures contract, you undertake to do three things.

  1. Buy the amount of gold specified in the contract
  2. Buy at the price specified in the contract
  3. Buy at the expiry of the contract

This could be after 1 month, 2 month, 3 months or so on.

Of course, if you sell the gold futures contract before it expires and you don’t have to worry about actually buying the gold.

Invest in Precious Metals online

Trading Gold CFD Online vs Actual Gold Market

Investing to Gold market online is a bit different from buying actual Gold on your own in some shops.

So what are the main differences between ‘buying Gold physically’ and ‘buying Gold online for trading’?

Buying Gold in Shop Trading Gold Online
Commission is higher Commission is lower
No Leverage Leverage can be applied
Transaction may take a few days Transaction is instant
You can own the actual Gold with you You can’t own the Gold with you

Gold is mainly used for accessories, mobile and medical industry etc.

While accessories made with Gold does look very nice and it is how normally people see how the Gold is used, trading Gold online to make profit from the difference of prices is one way to take advantage of Gold market.

List of FX Brokers offering Gold

How the Gold Market Price changed over the years?

Gold is known as a ‘Safe Haven’ market, as in when the world’s financial market is feeling risks and volatility, investors buy (invest in) Gold in order to make sure that their funds are at less risks and less volatility.

Although Gold’s price changes every moment.

The below price chart shows the movement of gold Price since 2010 till 2018.

spot gold xauusd market price chart
Market Price movement in 8 years
The price chart above shows the Gold’s price per Ounce.

You see the change in the market prices above, and that’s where online traders come in to make profit.

Trading Gold online works very simple:

  1. Open an account with a FX and CFD broker that offers Gold.
  2. Make a deposit to your online account.
  3. Predict the price of Gold.
  4. Buy if you believe the price goes up. Sell if you believe the price goes down.
  5. Close the order afterwords to confirm your profit (or loss).

Trading account types that offer Gold

Why you should trade Gold CFDs Online?

There are several merits to trade Gold online than actually buying the physical assets at your local shops.

  1. Trading cost is much lower.
  2. You don’t need to go to shops to asses the value of the gold-made products by yourself.
  3. Transactions are done instantly.
  4. You can invest in larger amount using ‘Leverage’, thus you can earn more profit and loss for the same amount of investment.
  5. You won’t own a Gold, so there is no security problem.

Find the broker to trade Gold

What affects Gold market price?

Gold’s market price changes every moment just like other markets.

The below price chart shows the movement of Gold’s market price within 1 hour.

spot gold xauusd market price chart 1 hour
Market Price movement in 1 hour

Given the huge quantity of gold stored above ground compared to the annual production, the price of gold is mainly affected by changes in sentiment which is the demand rather than changes in annual production which is the supply.

According to the World Gold Council, annual mine production of gold over the last few years has been close to 2500 tons about 2000 tons goes into jewelry or industrial dental production, and around 500 tons goes to retail investors and exchange traded gold funds.

Central banks and the international monetary fund play an important role in the gold price.

Although central banks do not generally announce gold purchases in advance, some such as Russia have expressed interest in growing their gold reserves again as of late 2005.

In early 2006, China announced it was looking for ways to improve the returns on its official reserves. Chinese investors began pursuing investment in gold and it has since become a top gold consumer.

List of Online Gold Brokers

Why is Gold not used as money anymore? What is the history of Gold as currency?

Gold is the oldest precious metal known to man.

It is found widely throughout the geologic world and since the early days, people have considered it as a precious metal for coinage, jewelry and other arts.

Gold has been used throughout history as money and has been a relative standard the currency equivalent specific to economic regions or countries until recent times.

Many European countries implemented gold standards in the latter part of the 19th century until these were temporarily suspended in the financial crisis involving World War I.

After World War II, the Bretton Woods system had the USD to gold at a rate of US dollars 35 per troy ounce.

The system existed until the 1971 Nixon shock, when the US unilaterally suspended the direct convertibility of the USD to gold, and made the transition to a flat currency system.

The last currency to be divorced from gold was the Swiss franc in 2000.

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