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Your guide to trading gold

Learn how to trade gold and find out everything you need to know about the top-traded precious metal commodity
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Why is the gold market important to traders?

Gold is the world’s most popular precious metal and occupies an important role in the world economy. The yellow metal has always been highly valued across global markets and cultures, serving as a proxy of wealth and prosperity.

Appreciated far beyond its industrial usage, gold is one of the most widely-traded metal commodities. Gold deposits are rare and difficult to find. Its extraction from gold mines is a very time-consuming and expensive endeavour.

According to the latest estimates, the total global supply of gold is 170,000 tonnes. Since the 1970s, the annual gold production volume has tripled every year, and the purchased amount has quadrupled.

Goldinfo

Gold market trading hours

CME Globex provides electronic trading for 24 hours/6 days a week:

  • Sunday to Friday, 5:00 p.m. – 4. p.m. with a 60-minute break each day.

If you choose to trade CFDs, you can follow gold prices live in US dollars with the comprehensive gold price chart from Capital.com:

  • Monday to Thursday, 00:00 – 21:00 and 22.05 – 00.00
  • Friday, 00.00 – 21.00
  • Sunday, 22.05 – 00.00

How to trade gold?

There are several major reasons to trade Gold, however, the most common are the following:

  • Hedge against inflation

Unlike fiat currencies, gold traditionally preserves its purchasing power during periods of increasing inflation.

  • Hedge against international instability

During turbulent times in the world's economy, gold performs well at the expense of other assets - it is historically seen as a safe haven.

  • Speculate on gold price

Gold has always been considered an attractive trading instrument due to its historic  volatility.

  • Diversify portfolio

Gold can be popular with investors who want to balance their investments in a diversified portfolio.

Trading gold requires some consideration, due to the market’s high volatility and a wide choice of available instruments, from gold derivatives, such as futures and CFDs, to gold mining company stocks.

Trading gold can be extremely volatile resulting in a high degree of risk. The chance of making large profits goes hand in hand with the risk of large losses.

How to trade gold CFDs?

One of the easiest and most popular ways to trade gold is with CFDs.

A contract for difference (CFD) is a type of contract between a trader and a broker in order to try and profit from the price difference between opening and closing the trade.

Investing in gold CFDs saves you the inconvenience of paying for gold storage. In addition, CFDs give you the opportunity to trade gold in both directions. No matter whether you have a positive or negative view of the gold price forecast and predictions, you can try to profit from either the up- or downward future price movement.

Moreover, trading gold through CFDs is often commission-free, with brokers making a small profit from the spread - and traders try to profit from the overall change in price.

Additionally, the 5% margin offered by Capital.com means that you have to deposit only 5% of value of the trade you want to open, and the rest is covered by your CFD provider. For example, if you want to place a trade for $1,000 worth of gold CFDs and your broker requires 5% margin, you will need only $50 as the initial capital to open the trade.

Why trade Gold CFDs with Capital.com?

Advanced AI technology at its core: A Facebook-like news feed provides users with personalised and unique content depending on their preferences. If a trader makes decisions based on biases, the innovative SmartFeed offers a range of materials to put him or her back on the right track. The neural network analyses in-app behaviour and recommends videos and articles to help polish your investment strategy. This will help you to refine your approach when you trade gold.

Trading on margin: Thanks to  margin trading, Capital.com provides you with the opportunity to trade gold CFDs and other top-traded commodities, even with a limited amount of funds in your account.

Trading the difference: By trading gold CFDs, you don’t buy the underlying asset itself. You only speculate on the rise or fall of the gold price. CFD trading is no different from traditional trading in terms of its associated strategies. A CFD trader can go short or long, set stop and limit losses and apply trading scenarios that align with his or her objectives.

All-round trading analysis: The browser-based platform allows traders to shape their own market analysis and make forecasts with sleek technical indicators. Capital.com provides live market updates and various chart formats, available on desktop, iOS, and Android.

Focus on safety: Capital.com puts a special emphasis on safety. Licensed by CySEC, it complies with all regulations and ensures that its clients’ data security comes first. The company allows clients to withdraw money 24/7 and keeps traders’ funds in segregated bank accounts.

Top 5 gold market stocks by capitalisation

Acquiring shares of mining and exploration companies is another popular, albeit indirect way of trading gold. In times when gold is rising, investors in gold stocks can profit. A list of some of the key players on the gold market includes the following businesses:

  • Barrick

Headquartered in Toronto, Canada, Barrick is the largest gold mining company in the world. Originally it specialised in oil and gas extraction. The company’s shares are listed on the Toronto (TSX) and the New York Stock Exchange (NYSE).

  • Newmont Mining

Based in Colorado, USA, Newmont is the only gold company, included in  the Standard & Poor’s 500 Index (S&P 500). The company’s shares are listed on the New York Stock Exchange (NYSE).

  • Polyus Gold

Headquartered in Moscow, the company is the largest gold miner in Russia. The Polyus shares are listed on the London (LSE) and Moscow Stock Exchange (MCX).

  • AngloGold Ashanti

Based in Johannesburg, the company is an international gold explorer and miner. It operates 17 mines in 9 countries. The company’s shares are listed on the Johannesburg (JSE), Australian (ASX) and New York Stock Exchange (NYSE).

  • Newcrest Mining

Australia’s leading gold mining company, Newcrest originally was a subsidiary of Newmont Mining. The company’s shares are listed on the Australian Securities Exchange (ASX)

Gold price historical chart

Goldchart

Considered as one of the oldest currencies in the world, gold has always been fairly volatile. However, there have been periods of inactivity, with relatively little movement in the gold price until the 1970s.

In 1971, after the gold standard for the US dollar was removed, a long uptrend started. The gold price reached a record high of $2,076 per ounce in February 1980. Since then it has fallen and risen - and these sort of trends makes it popular with both traders and investors alike.

Gold price over the last ten years:

Gold table

The latest gold price per ounce (oz) as of 31 September 2018) was $1,190.

To follow the most recent ups and downs of the gold price, check out our live gold price chart.

FAQ

How much gold is there in the world? It would be fair to say that gold deposits are distributed on every continent, except Antarctica. Meanwhile, the top 10 countries, producing gold, include the following:

Rank

Country

Annual gold production in metric tonnes

#1

China

455

#2

Australia

270

#3

Russia

250

#4

USA

209

#5

Canada

170

#6

Peru

150

#7

South Africa

140

#8

Mexico

125

#9

Indonesia

100

#10

Uzbekistan

100

The officially reported gold reserves, held by each country are the following*:

Rank

Country

Amount of gold in tonnes

#1

USA

8,134

#2

Germany

3,374

#3

Italy

2,452

#4

France

2,436

#5

China

1,843

*Please note that central banks usually don’t allow independent audits, so the real figures may significantly differ from those indicated in the table above.

Historically, platinum has tended to rank higher than gold and is generally appreciated as the more valuable precious metal. There are several reasons, why platinum has gained this reputation:

  • It is rare. There is much less platinum than gold in the earth
  • It is more difficult to extract (only several hundred tonnes per year)

However, platinum has a much more extended application area, being used for many different industrial purposes. It means that its price fluctuates more like the price of an industrial metal, than a precious metal. That is why the platinum price tends to correlate more closely with the global economic performance.