Gold has long been a symbol of wealth and a sought-after investment. Diving into the gold market can be speculative and exciting for freshman dealers. This companion will walk you through the fundamentals of gold trading, covering practical knowledge, recommended apps, influential numbers, dissecting the gold market, valuable websites, threat operation strategies, and how to start investing in gold. A little heads up! This composition is long but knowledgeable! You will be well-equipped to embark on your gold trading trip by the end.
Why Gold?
Gold’s appeal as an investment stems from several key factors:
Inflation Hedge:
Gold is frequently seen as a barricade against inflation. When inflation rises, the value of paper currency erodes, but gold generally retains its value.
Safe Haven:
In this unpredictable finance world, market fluctuations and economic crises frequently occur, and that’s where gold comes in! This is because the value of gold has surged during these times, serving as a refuge for investors.
Diversification:
Gold can diversify your investment portfolio, reducing overall threat. It frequently behaves differently from stocks and bonds, furnishing balance during market fluctuations.
Types of Gold Investments
Physical Gold:
This includes gold bars, coins, and jewelry. While it offers the advantage of tangible ownership, it also requires a secure storehouse and may dodge fresh costs.
Gold Futures:
Contracts to buy or sell gold at a future date at a specified price. Futures trading requires a good understanding of market dynamics and can be primarily manipulated, increasing implicit earnings and losses.
Gold ETFs (Exchange Traded Funds):
ETFs are financial instruments that track the price of gold and trade like stocks on exchanges. They provide a convenient way to invest in gold without handling its physical essence.
Getting Started with Gold Trading
Educate Yourself:
Before investing in gold, it’s crucial to understand the market and its dynamics. Start by reading books and articles and watching videos on gold trading. Some recommended books include “The Goldwatcher: Demystifying Gold Investment” by John Katz and “Gold: The Once and Future Money” by Nathan Lewis.
Choose the Right Investment Vehicle:
Based on your risk tolerance, goals, and interests, choose the applicable gold investment vehicle. If you prefer physical ownership, consider buying gold bullion or coins. However, gold ETFs might be a better option if you are looking for further liquidity and lower hassle.
Gold Trading in The Digital Era
With the rise of digital trading platforms, getting into the gold market has become as easy as opening an account. This guide will inform you about three apps frequently used by beginner traders: Robinhood, Webull, and eToro, highlighting their attributes to help you start trading in gold.
Robinhood
Robinhood is a stock broker allowing users to buy and sell stocks, gold ETFs, cryptocurrency, etc. The app is so popular because it was the first stock broker to offer commission-free trading, making it a win-win situation for beginners. It has become the go-to investing app for beginners over the past few years, primarily due to its free trade and easy user interface. The app offers the user two types of accounts- the first is a standard broker account where the users can simply invest, and the second is a user can create an IRA account to invest for retirement. The three different ETFs that are reasonably priced- below $15 and are invested in gold only are IAU iShares Gold Trust for $11.59, GLDI Credit Suisse X- Links Gold Shares for $9.21 and OUNZ Merk Gold Trust for $11.91. Some other impressive ETFs are JDST, DUST, and NUGT. Regarding security, Robinhood is licensed and regulated in the United States. However, like any other platform, it has faced challenges, so users should remain extra careful.
Getting started with Robinhood:
- Download the app from the App Store (for iOS) or Play Store (for Android). Create an account. Complete the KYC process. Review and submit your application.
- After setting up your account, link your bank account to Robinhood to fund your trading account. Tap on the ‘ACCOUNT’ tab and click ‘TRANSFERS’ to add money. That is it for your registration process!
- Use the search bar to find gold ETFs (Exchange-Traded Funds). Before making the purchase, review the ETF’s details, including its price action history and other relevant data.
- Once you have made your purchase, tap on the chosen gold ETF and select ‘BUY.’ Enter the amount you wish to invest. This app also allows you to buy fractional shares so that you don’t have to invest wholly in high-priced ETFs.
- Choose between MARKET ORDER( executes the trade at the current market price) or LIMIT ORDER( executes the trade at a specific future price).
- Tap ‘REVIEW’ and then ‘SUBMIT,’ and your order will be placed without any additional fee.
- Click ‘SET ALERT’ on your gold ETF page to keep yourself updated using the performance charts and notifications this app provides. These will help you analyze price trends.
eToro
eToro is a fully regulated leading global assets trading platform. it boasts more than 24 million users worldwide. Unlike other trading platforms, eToro allows you to follow and copy successful traders, which is a handy feature for beginners. In Fact, you can even get paid by allowing other users to copy your portfolio. One of the key selling points of this platform is that it offers plenty of advanced trading tools such as stopping loss, taking profit, and setting orders that execute automatically according to the price. However, it does charge other different kinds of fees like spread fee, weekend fee, inactivity fee, and withdrawal fee of $5 per withdrawal.
Getting started with eToro:
- Download the app and complete the KYC process by uploading identification documents. The next thing you have to do is to link your bank account or use other funding methods available in the app to deposit money into your eToro account. Go to the “Deposit Funds” section and go through with all the instructions..
- Use the search bar to find gold CFDs or ETFs using prompts such as XAU/USD or gold-focused ETFs. Select the gold instrument you wish to buy.
- Click on ‘TRADE’ to start the process. Then, enter the amount you wish to trade and select the order type: MARKET ORDER or LIMIT ORDER.
- Add ‘STOP LOSS’ (to automatically close the trade if the price moves against you beyond a certain point) or TAKE-PROFIT (to lock in profits when the price reaches your target).
- Tap ‘OPEN TRADE’ to complete the transaction. Before making a trade, it’s crucial to analyze the gold price charts. eToro provides various tools for technical analysis, such as moving averages, RSI (Relative Strength Index), and MACD (Moving Average Convergence Divergence). As a beginner, take your time to learn how these indicators work, as they can help you make effective decisions.
- Utilize eToro’s unique feature of socializing with experienced traders to your best advantage. You can follow such traders by using the ‘COPY PEOPLE’ feature available on the app. Some of the traders who are experts in commodity trading are as follows:
@OlivierDanvel:
Olivier Danvel is the star of eToro and is one of the most followed traders. He specializes in trading commodities and is known for a conservative, risk-managed approach.
@JeppeKirkBonde:
He is the most copied investor on eToro. This trader has a diversity of investments in commodities and also indulges in gold trading.
@MalsoloTrader:
He focuses on conservative trading, focusing on stability and growth.
@ZMKCapital:
This trader’s portfolio oftenly includes gold and he provides in depth market analysis and long term strategies.
By following these traders, you can gain valuable insights into the gold market and set your strategies accordingly.
51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Webull
Webull is purely an investment hub for the US market. It offers a great brokerage account option with features like fee-free investing and a fully featured trading app, which is also a registered broker-dealer with the Financial Industry Regulatory Authority (FINRA). It allows you to trade in stocks, ETFs, or cryptocurrency. Popular gold ETFs on Webull that are great for your portfolio are SPDR Gold Trust(GLD) and iShares Gold Trust(IAU). You do not need a minimum account balance to start trading in gold-related assets.
Getting started with Webull:
- Go to Webull’s website or download the app.
- Create an account and go through with the KYC process.
- Webull supports various funding methods, including bank transfers, wire transfers, and direct deposits. Choose what works best for you!
- Deposit the money you want to start with into your Webull account. Complete the deposit, but be aware of any fees associated with your chosen payment method.
- Locate gold instruments using the search bar on the top of the platform. Explore the app’s charting tools to analyze the conditions of the gold market before buying or selling. If you think the prices will increase, place an order to buy. If you expect the prices to drop, place an order to sell.
- Click “Trade” and enter the number of gold assets you want to buy or sell. Then, set your desired price, stop-loss, and take-profit levels. Review all details before confirming.
- You can modify your stop loss or take profit settings according to the market.
- Join Webull’s community, wherein traders discuss their strategies and market outlook.
- You can go to the ‘TRANSFERS’ section and click ‘WITHDRAW’ whenever you wish to withdraw your funds.
Influencers and Analysts
Following reputable analysts and influencers can provide valuable insights into the gold market:
Peter Schiff:
An economist and gold advocate known for his views on gold as a hedge against economic instability.
Jim Rickards:
Author of books on gold and precious metals, offering insights into macroeconomic factors affecting gold.
Ralph Aldis:
A fund manager specializing in precious metals who often provides analysis and forecasts.
How much money do you need to trade gold? Can I trade gold for $10?
The capital needed to trade gold depends on your chosen trading system. In the forex market, starting with occasionally as low as $100 is possible. While engaging in gold trading with as little as $10 is technically doable, this approach must be revised. To trade gold effectively, it’s generally recommended to begin with a more substantial amount of capital.
Remember to start small, stay informed, and continuously refine your strategy as you gain experience. With these insights and resources, you’re well on your way to becoming a knowledgeable and effective gold trader. Happy investing!
Also read: 12 Golden Rules to include in a Trading Strategy
what moves gold market?
factors that affects the gold market is inflation and interest rates, forces of demand and supply, the value of US dollar.
what is the best time to trade gold?
The gold operates 24 hours a day, five days a week. however gold is most active from 8:00 AM to 12:00 PM(GMT)
