Gold is one of the most-traded precious metals on the planet, and it provides the greatest selling conditions in many economic environments. We analyze developments in the gold markets and provide recommendations on how to trade gold.
Table of Contents
Why is gold trading so common?
Over the years, gold has been valued as the most prized of all precious metals, sought for its cultural and financial importance. It was central to the pricing of the world’s currencies until the 1970s, and is intimately tied to the US dollar price.
The investor community was initially called after the metal, as in 1974, it was introduced to give clients the ability to exchange gold on leverage rather than direct possession. People also prefer to purchase gold as a type of protection, as gold is viewed as safe refuge during economic chaos.
Gold is a stable deposit and is an asset politicians, in tough economic times, prefer to turn to. Unlike a commodity, gold doesn’t have a cap to how much can be extracted, and unlike a stock, a corporation can’t be disbanded. The metal’s growing market has contributed to the metal being used as a hedging weapon against inflation or currency devaluation.
However, as investments become common, there is the danger of a bubble being formed, which could cause significant uncertainty as it bursts. Therefore, more gold merchants tend to diversify into other markets.
What time of the day are gold markets traded?
Gold prices are unpredictable depending on whether you deal on the spot, futures, or options. There are competent brokers that offer spread betting and trading CFDs on spot gold prices over the week.
The site helps you to swap gold futures for stock options. The business hours are 24 hours a day, five days a week except from 10 pm to 11 pm in the UK.
IG provides spread betting, and CFD trading on regular options between 7:30 am and 9:15 pm (UK time) for selling gold options directly. As well as regular and weekly choices, we also offer monthly and annual options.
Spreads betting and trading CFDs allow you to invest on gold price without either buying or taking delivery of gold. This implies that they will be used to determine whether the price of gold is rising or declining (by going short).
How do you decide when to trade gold?
There are numerous occasions when a trader might want to start a gold position. This is since the price of a good is dependent on the existing political and economic environment, which can adjust on a whim. An enhanced supply but constant demand contributes to lower costs and a decreased supply, but consistent demand leads to lower prices.
Gold is also called a “safe haven” currency, and in periods of economic instability, it would not depreciate or even rise in value. If more and more citizens continue investing in gold, it will contribute to more gold demand than supply.
How can a person trade gold?
There are four main methods to trade gold, like spot market, futures, investing directly in gold, or options.
- Spot rates allow you to put trade for gold at a particular price.
- Trading can benefit you from the price of gold futures.
- Buying gold options is taking a position about the future price of gold.