Gold Trading
Traders can profit from the price movements of commodities like gold without actually owning any gold. The most popular way to do this is to – with gold. Contracts for Difference (CFDs) are essentially temporary orders to buy/sell a pre-stated amount of gold. Profits and losses are determined by changes in the gold price while the contract is active. All gold CFDs have a contract duration.
Here at Zendtradeonline, it is quick and easy to trade gold online. We are regulated to offer real-money gold trading to our Traders Around the Globe. Among others, you will enjoy these benefits:
Key Take Outs
- We offer competitive spreads on all gold trading activity
- We offer leverage of 10:1 to allow for bigger gold trades
- Trade on the powerful Zendtradeonline platform
- Enjoy full Mobile Trading functionality with Zendtradeonline around the clock
- Traders can profit on gold price movements on the upside or downside
How to Trade Gold using Technical Analysis
TThose who are familiar with technical trading strategies will see how the market conditions have changed in gold prices over the years with a look at a long-term chart. It’s easy to see that from 1999 through 2012 gold prices were in a solid uptrend. Then from 2012 through 2015 we saw a steep correction that turned into a sideways market from 2015 through 2019. Since 2019 the uptrend has resumed. It is always important to know the underlying trend in the market when choosing a trading strategy. When the market is trending strongly, you’ll want to use a momentum-based strategy, but when the market turns sideways a ranging strategy or low volatility strategy is best.
When using technical analysis to trade gold the best way to start is by using simple trendlines and prior highs and lows as levels of resistance and support. These can give you fairly accurate price targets if you understand the underlying trend. To find support levels simply connect the previous lows, while resistance levels are found by connecting the prior highs. And for those familiar with forex patterns like double tops and bottoms or head and shoulders, you’ll find these to be just as accurate in analysing the gold market. More advanced technical traders can also use Fibonacci retracement levels, various oscillators, or other types of analysis to find the best entry and exit points.
Ways to trade gold at Zendtradeonline?
For an investment of just $100, Traders Around the Globe can begin trading gold and other precious metals online. Zendtradeonline is a trusted and licensed Brokerage, with an exceptional reputation. We have been operational for 11 years, and our gold trading experts are standing by to assist you every step of the way.
Among others, you will be able to access a wide range of tools and resources, and enjoy full use of all trading benefits exclusive to Zendtradeonline.
A wide range of trading solutions is available, including multiple top trading platforms and free automated trading solutions to meet your trading needs. Traders Around the Globe are assured of the perfect match between their skills and trading style, and the gold markets.
Our Gold Trading Techniques
It is also possible to trade gold with fundamental analysis techniques. The most important consideration on any given trading session is whether market sentiment is positive or negative. This can have a strong impact on markets, and even during a strong uptrend a period of negative sentiment can cause a steep drop in price. More advanced gold traders will also look to the U.S. dollar, because gold has a strong negative correlation with the USD. That is, when the USD strengthens gold will often fall, and when the USD weakens gold will often rise. It isn’t 100% accurate, but it needs to be considered because it is a strong correlation.
Another consideration for gold traders is the current demand for jewellery. Because 50% of gold production is consumed by jewellery production it’s a wise idea to keep your finger on the pulse of demand for gold jewellery, particularly in India and China, where gold is still used as a long-term investment for many people. Other “hidden” things that can influence the price of gold include central bank buying and selling, and the small industrial usage of the metal.
Traders also need to keep an eye on the supply side of things by watching production numbers from the major gold mining companies like Newmont Mining and Barrick Gold. And just like any other asset all the money management and risk management rules apply. Always avoid over-leveraging your trades, make sure to set targets for exits, and always set your stops in case something unexpected happens in the market.
Why is Gold a Safe Haven Asset?
A safe haven asset protects investors during times of market turmoil or extreme volatility. At the very least, safe-haven assets ensure capital preservation during uncertain times. Gold has for a long time proven its safe-haven credentials, maintaining or increasing its value during times of turmoil when practically all other assets decline in value.
A major reason for this is that gold has held its aesthetic value since ancient times. Its physical characteristics have always amazed man – it is malleable, practically indestructible, and very rare. Gold also has a limited supply, unlike fiat currencies which can easily be printed by underlying governments or central banks. There’s only a finite amount of gold that will ever be mined, and even when new deposits are discovered, it takes a few years from exploration to eventual production.
As a safe-haven asset, gold protects investors during times of crisis and not necessarily during times of normalcy when investors are high on confidence. Even so, it is important to understand how to trade gold when there is market instability. It has been observed that gold works as a safe haven asset for a limited time during crisis times until investor confidence starts to return or volatility starts to decline. This means that investors can buy gold in crisis periods when there is extreme volatility and then sell it a few days later when volatility returns to normal. In this way, investors can, at the very least, protect their capital from extreme market fluctuations; but they can also earn returns during a market downturn. This also means that gold can act as a portfolio diversifier- ensuring that the overall risk of a portfolio is reduced without limiting the potential returns.
