How to Invest in Gold?
Trading in Gold is a very simple process, but one should not try or start trading himself without doing enough homework. It is not feasible to start trading on our own because these instruments are very volatile. It is advisable to take enough training and knowledge from your broker before you start trading yourself.
There was a traditional method in which the traders used to call their brokers to place the order and then wait to get a call back from them. It was a very less efficient method. These days we have Online trading platforms in which you can trade yourself irrespective of where you are or what you are doing.
Primary Steps to be followed are:
- Choose a commodity broker
- Account paper-work
- Things to know before you start trading
Nowadays, it is possible to earn money from trading the bullion without having to own it. Trading of Gold CFD is buying or selling a specific amount of Gold. The profit or loss we earn depends on the change in the price of the yellow metal during the period of the contract.
There are various forms of Gold available to investors:
Gold futures– It is a contract for the delivery of the yellow metal in the future at a predetermined price. Traders use this contract to manage the price risk. These types of contracts are traded at centralized exchanges. This offers more flexibility and leverage than trading commodities themselves.
Gold certificates- gold certificates are very much similar to the paper banknotes. They were started during the 17th century as proof of gold ownership and were used like cash payments. Now a day these are issued by the government. The only problem with this kind of investment is liquidity. They are not available instantly.
Gold-based ETF- as Gold becoming a more popular trading instrument and offers better returns, many funds have started trading Gold know as an exchange-traded fund or ETF for short. These funds are managed by experienced gold trading experts, and these funds trade like other equity on an exchange.
Contracts for difference- It is part of derivatives and mostly used by traders and not by long term investors. It is a type of contract which allows traders to speculate on the price movement, without either a right or obligation to deliver the actual underlying asset. CFD has many advantages over traditional stock trading. It provides exceptional leverage and a lower margin requirement. It also helps traders to trade market from both sides that mean a trader can go long as well as short according to their analysis.
What influences Gold trading
Supply and demand- 50 % of the demand comes from jewelry production and manufacturing sectors; 40 % of the demand comes from investment purposes and rest 10% from others. The price of Gold is directly related to the supply and demand for Gold in different sectors.
Market Volatility- it is one of the most volatility instruments, and traders exploited this price movement to make a profit.
How to trade Gold?
Open a trading account at Capital Street
Put funds in the account to have a sufficient amount.
Choose the position size.
Take Buy or Sell position according to your analysis.
Why trade Gold CFD with CAPITAL STREET
- The fully regulated and customer-centric platform which offers a wide range of services and features.
- CSFX offers you our stat of the art platforms and range of trading tools
- Leveraged trading with no hidden charges.
- Automate your trade facilities and direct access to the market
- Safety of funds