Gold Trading

what is gold trading ? Gold Trading is an online gold trade in the forex market without involving the transfer of gold assets physically. This is an alternative way to take advantage of the rise and fall of gold prices. The concept of Gold Trading is actually similar to forex trading, so gold trading is not difficult to do, especially for those of you who have already done forex trading.

Main Characteristics of Gold Trading in the Forex Market
Given the procedure for Gold Trading with similar forex trading, then if you have never traded on the foreign exchange market, you must first understand the basic concepts of forex trading. After studying forex, you need to understand some of the following Gold Trading characteristics:
In Gold Trading on the Forex market, gold is also considered a currency with the XAU symbol. Usually gold is paired with US Dollar in the form of XAU / USD pair. When the US Dollar is expected to decline, most investors will take long positions XAU / USD, meaning buy XAU and sell USD.

Most gold traders conduct Gold Trading as a form of protection of their investment assets against risks in currency trading on the forex market. For example, when the value of the US Dollar weakens, the price of gold will increase because market participants see opportunities for gold investment to reduce losses in currencies.

 How does Gold Trading work?

In Gold Trading, a trader can take long and short positions to take profits. If a gold trader believes that the value of gold will experience an increase against the US Dollar, then he can buy XAU / USD. But on the contrary, if the value of gold against the US Dollar is expected to decline, traders will take XAU / USD short positions.

Strengths and Weaknesses in Gold Trading
The main advantage that makes Gold Trading superior to ordinary gold investment is that this trading activity is not related to the process of physically transferring gold between the parties making the transaction. This condition has a positive impact on investors because there are no costs for storage, insurance and transportation that must be paid when investing in physical gold (gold bullion). In addition, Gold Trading on the forex market also offers opportunities for traders to get bigger profits, because the forex market is a highly liquid market with large trading volumes.

Apart from these promising advantages, Gold Trading also contains several risks that traders must be aware of so as not to be exposed to loss. First is the risk associated with margin. Traders are required to top up funds when the margin amount from the account is below a certain minimum percentage level.

For example, a forex broker has stipulated in the contract that the amount of margin from the trader's account may not be less than five percent of the size of the trading position that is still open at that time. So, if the amount is below that percentage, the trader must deposit more funds so the broker does not close the trading account.

A further risk for Gold Trading is leverage risk. The more you dare to use high leverage, the higher the risk of losing all your funds. For that, make sure to be careful when using this leverage facility.


Interested in Gold Trading? If so, before starting to really decide to do Gold Trading on the forex market, it is advisable to learn and fully understand the basics, characteristics, risks and the best strategies in order to get maximum profit in Gold Trading.