How To Trade Gold

dark construction pattern texture
Photo by Eva Elijas on

Daily, the trading world continues to expand and prosper. Investors trade in equities, stocks, options, indices, commodities, and precious metals, among other things. Gold happens to be in the last category of precious metals that traders are enthusiastic about trading with.

Gold is considered to be the most valuable metal on the planet and, as such, is valued at the highest level. As a result, day trading gold must be profitable. But how do you go about it? Continue reading to find out more.

Comparing Gold Trading To Forex Trading

Gold has long been seen as a measure of wealth because, unlike currencies, it is not susceptible to the dictates of monetary authorities. Gold prices are unaffected by either monetary or fiscal policy and will always be valued — unlike a currency, which might become nearly worthless due to uncontrolled inflation.

Traders can utilize gold and other assets such as the South African Rand, Swiss Franc, and US Treasury notes and bonds as a safe haven. When traders are concerned about risk patterns, they will purchase safe-haven assets. On the other hand, traders are more likely to sell haven assets.

Market liquidity is another essential thing to consider while learning how to trade gold. According to the World Gold Council, gold has higher average daily trading volumes than any other two currencies except USDJPY, EURUSD, and GBPUSD. Because the trading volume every day of gold is higher than that of EURJPY, spreads — the difference in the exchange prices is low, making gold comparatively affordable to trade.

Finally, the gold market is open approximately 24 hours a day. Gold exchanges are available virtually constantly, with trade flowing smoothly from London and Zurich to Sydney, New York, Hong Kong, and Tokyo before returning to Europe. This means that liquidity is abundant at all times.

Simple techniques to trade gold

Technical analysis

Technical analysis uses prior trendlines, highs and lows, and chart patterns. When the gold price increases, a substantial past high above the current level and a significant previous low when the value is falling will be apparent targets.

When a line on the graph connecting prior highs is above the present level in an uptrend, it acts as resistance, while a line joining recent higher lows acts as support – the opposite is true in a declining market.

Elliott Wave analysis and the Fibonacci retracement levels are more advanced technical trader’s tools that you learn as you go.


Another technique you can use to trade gold is copy-trading, where you essentially copy someone else’s trading decisions and take them as yours. The great thing about this technique is that it is straightforward; however, you need to get great gold traders to emulate their moves. If you do not acquire good gold traders to copy, you lose just as they do.

Another positive aspect of copy-trading is that you do not have to be an expert with knowledge about the chart patterns and all the technicalities of trading. Just get someone to copy, and you are good to go.

Bottom line 

Trading gold is not rocket science. If you have the right tools, you are good to go.

Was it worth reading? Let us know.