Gold trading

Gold has been traded since the early ages, dating back to before 500 BC. It wasn’t until modern society when it became more than a precious metal used for jewellery or currency and became a vehicle for investment. In the 1980s, the electronic trading revolution turned gold into a trader’s asset, and the price of gold has since grown from roughly $36 in 1970 to as much as $1750 at today’s market prices listed under the gold trading symbol XAU.

A number of factors impact gold trading price, including producing gold, how much gold is held in central bank reserves, the value of the US dollar, demand from the jewellery market and other industries, and its use to protect wealth during times of economic instability.

Gold production

The amount of gold that is mined and released into the market each year impacts the price of gold through the balance of supply and demand. To date, as much as 65% of the total gold supply has been mined, and the finite supply makes the asset scarce.

Central bank reserves

Central Banks often hold a substantial amount of gold holdings as an emergency reserve currency. These banks buy gold to protect and enhance their purchasing power, and as a hedge against inflation.

Value of the US dollar

Gold is traded under the XAU ticker symbol and is often paired against the US dollar in the XAU/USD trading pair. The power and trend of the US dollar often can impact the price of gold.

Worldwide jewellery and industrial demand

Gold has long been used as a sign of power, strength, and wealth, and is commonly used in ornate, decorative jewellery such as watches, rings, and gold chains. Depending on the demand for these products and the supply brought to the market, it can have a dramatic impact on gold prices. Gold has several other industrial uses, as well, such as an electrical conductor in micro-chips and motherboards.

Wealth protection

Buying gold is a habit of high wealth investors seeking to protect their wealth during times of economic distress. When the economy is crashing, gold prices often rise as investors look for a safe haven reserve to store their money.

Because gold has so many uses, industrial, decorative, or monetary, it makes for an amazingly lucrative financial instrument for traders and investors. Those looking into Gold have a number of options available to them.

Physical metal

Investors can purchase actual physical metal, either as gold bars, gold bullion, or even through jewellery that can be worn decoratively, but later melted down and sold as raw gold.

Gold certificates

Gold certificates are a certificate proving ownership of gold, issued by another entity storing the gold owned by the investor. Many years ago, gold certificates were used as paper currency in the United States.

Gold futures

Gold futures are contracts that essentially bet on a change on the future price of gold. These futures contracts often come with expensive fees that can eat into the profits of traders.

Gold-Based ETFs

For those investors looking to gain exposure to gold without owning the underlying asset, may opt to invest in a gold-based ETF, or exchange-traded fund.

Contracts For Difference

Contracts for difference, or CFDs, one of the better options for traders who want to gain exposure to gold markets. CFDs can be executed faster than other financial instrument types.

PrimeXBT offers Gold trading of CFDs, also known as a contract for difference. This is a good option for those looking to gain exposure to the Gold market. By choosing CFDs on PrimeXBT over Gold futures trading, traders can avoid excessive broker fees from their futures contract and generate potentially better profit margins from positions they open.

PrimeXBT’s ultra-fast order execution and its stable, reliable trading engine ensures the tightest spreads and best trading experience. The trading platform is packed with advanced trading tools, such as long and short positions, advanced order types such as stop loss and take profit orders.

The platform is also safe, secure, and offers 24/7 customer support service via a live chat, community channels, and much more.