Gold trading involves the practice of speculating about the price of gold markets to make profits. This is usually done through futures or options, shares, and exchange traded funds (ETFs). Usually, physical bars and coins of gold are not handled during transactions. Instead they are settled with cash.
There are many reasons you might trade gold.
There are many options when it comes to trading gold. You don’t need to stick with the old mantra ‘buy low and sell high’. You can trade long and short on gold prices. This allows you to take advantage of market that decline in price as well as markets that rise. The goal of gold trading, regardless of your position, is to predict the direction the market will go. The market will move in your favor, but you lose more profit the further it goes.
Futures contracts represent the most common way to trade in gold. A futures contract is an agreement that allows you to sell or buy gold at a certain price at a particular date. You can use futures to purchase or sell physical commodities, but you don’t always have to. Futures contracts may be settled in cash.
Gold contracts can be traded mostly on the OTC London and US futures markets COMEX. Online gold trading brokers can also allow you to trade futures for gold.
Options for gold allow you to trade it at a certain price, known as the strike, on a specified date. The right to buy the gold is granted by a call option. A put option allows you to sell the metal. Many gold options are based on gold futures. Trading gold options is possible with the best gold trading broker.
There are several gold buying stations scattered throughout South Africa. Currently you can sell your precious metal at the Gold Buying Stations situated in Johannesburg, Cape Town, Durban, Pretoria and others. You must have gold in disc or bar form. It should not contain amalgam or mercury. With the best online gold trading brokers, you can also trade gold.
Just three steps are required to determine your position
CFDs will allow you to make trades in gold and gold-linked securities. If the asset’s price is expected to rise in a specified time frame, then you’d buy. Conversely, if it falls, you’d sell.
You need to do extensive research to determine which market direction is likely.
Owning physical gold is preferred to gold receipts, gold mining stock, or gold ETFs for long-term investors. It is now easier than ever to purchase high-quality, physical gold online. You can have it shipped home, or stored in a secure vault. But, it’s possible for fake gold or metal coins to be sold online. That is why you should ensure that your dealer is reputable and established.
The top online gold trading brokers allowed to trade in South Africa:
Some people say gold is the hardest market to trade. There is truth to that statement. Gold doesn’t behave like other markets, so if investors want it to be profitable (which it can be), they must keep these things in mind.