Trading gold online
Trade gold with binary options or ETF
Minimum deposit: 1€
Regulation:Many regulation and registratations
Trade gold price with leverage or with binary.
Minimum deposit: 100€
Regulation:CySEC,FCA
Trade gold price with leverage or with ETF,s.
Minimum deposit: 100€
Regulation:CySEC,FSB
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Trading CFDs may not be suitable for you. Please ensure you fully understand the risks involved.
Investing in Gold with CFDs, Futures Contracts or ETFs
Trading gold requires one to first purchase the precious metal. With a CFD (contract for difference), you would typically put up a relatively small amount of money, known as the “margin”, and use leveraging to invest in a larger stake of whatever commodity you’re investing in. That commodity might be gold.
An investor never takes ownership of the underlying entity when trading in CFDs, whether that be gold, Forex, a stock index, or shares. Rather, a CFD is a type of “financial derivative”. That means its value is derived from the performance of something not owned by the investor. You might think of it as virtual ownership.
With a CFD, you would usually be magnifying your gains or losses via leveraging. This, of course, is appealing as an investment but risky at the same time. If the commodity you’re investing in takes a sudden downturn in fortune, your initial investment can easily be wiped out or even go into the red, depending on the safety mechanisms in place.
The Benefits of Gold Trading
There are several reasons why one might invest in gold. The most prominent reason is that it holds its value well, whether against the passing of time, inflation, deflation, or during global political turmoil.
Because of its ability to sustain and maintain its value, gold has been a popular means of passing wealth down through generations. Although the price of gold can fluctuate sharply in the short term, it has always retained its value well in the long term.
In the short term, the value of gold rises and falls according to demand. That demand is affected by the state of the economy. A booming economy and stock market has historically caused a drop-in gold prices. The opposite is also true.
Since the value of gold tends to counterpoise the fortunes of stocks and economies, it is an effective way of diversifying a portfolio and offsetting risk. By investing in gold, the investor hedges against what are known as “tail events”, which might adversely affect the portfolio. The same principle applies to any investment that is inversely related to another.
Different Ways to Trade in Gold
As said, one way to trade in gold is via CFDs, where you’d invest in a bigger gold share than might otherwise be possible by leveraging a relatively small margin.
With CFDs, the investor opens a margin account with a broker, who then lends the difference between the invested margin and the asset value. The investor then pays interest on the margin account to hold his or her position for as long as the trade continues. Although CFDs do not usually have an expiry date, they are commonly used for short-term investment.
Spread betting is another way of investing in gold. This is similar in principal to CFD trading, allowing the investor to “go long” or “go short”, thus betting on either a rise or fall in value. Like CFD trading, spread betting also typically uses leveraging. Although spread betting is a lawful way of trading on gold in the UK, it is illegal in the USA.
Futures contracts, like CFDs, are financial derivatives whose value is based on an underlying asset. The asset is not owned initially, but a futures contract commits the investor to buying or selling the underlying asset at a prearranged price on an agreed date in the future. Futures contracts are mostly the domain of large-scale investors. One benefit is that prices are transparent, whereas the underlying asset price of CFDs might be adjusted by the broker for greater profit.
An ETF (exchange-traded fund) is often a more long-term investment strategy that suits gold. While leveraged ETFs do exist—mainly for short-term trading—you’ll pay full price for a traditional ETF, which would track the market value of gold. ETFs are a less expensive alternative to buying, storing, and insuring physical gold. In their standard form, ETFs are a transparent, easily monitored, and liquid form of long-term gold investment.