Are you having difficulties in trading gold as a beginner? Then this detailed guide is an good opportunity to learn gold trading.

As we all are acquainted that gold is a precious metal and it has high demand in current market. Gold has been trading since centuries and it is a safe haven for the economy of a country. Gold trading is now more digitalized and complex as well, especially for beginners. Don’t worry, we got your back.

In this article, we will delve into gold trading tips, types of investment, strategies, and how to start. Without further ado, let’s get into it.

Tips Before Starting Gold Trading

Here are some of the basic tips before you step into gold trading.

Get Knowledge About the Fundamentals

The gold market is quite liquid, the prices can move quickly without a notice. Therefore, as a beginner, it’s important to learn the basics fundamentals of gold trading and gain knowledge before diving into this market.

Moreover, you can learn and grab the nitty-gritty crucial points by consulting with gold traders online and practice their strategies. There are many free E-books and webinars available, where you can learn the gold trading fundamentals.

Learn Risk Management

Risk management is key to learn in gold trading. It’s crucial to implement proper risk management strategies in gold trading. Traders often leverage stop loss and take profit to minimize potential losses and manage their trades in a flexible way.

Learn What Moves Gold Prices

The price of gold has significantly increased from the last 10 years, rising from 1,298 per ounce in 2014 to 1,946 per ounce in 2023.  There are several factors, which influence the price of gold. Here are some of the following factors:

Geopolitical Events

Geopolitical events such as war, conflicts between nations, and other tensions. Gold prices are often fluctuated in geopolitical tensions.

US Dollar Price

As we all know, gold depends on the price of US dollar. Gold is inversely proportional to the price of USD. So, when the USD gain strength, the price of gold tend to decrease and vice versa.

Supply and Demand of Gold

Supply and Demand is one of the main factor gold price movement. Jewelries and other traditional items are made up for gold. As mentioned, gold is considered as a safe-haven assets in the time of inflation and currency devaluation.

Inflation and Deflation

Inflation and deflation do also play a role in moving the gold prices. When there is inflation, the price of gold rises and vice versa.

Do Technical Analysis of the Market

Technical analysis in forex trading involves analyzing historical price data, chart patterns, and various technical indicators to make predictions about future price movements of currency pairs. It is a method used by traders to study market behavior and make informed trading decisions based on the premise that historical price patterns tend to repeat themselves. It will also help you analysis the resistance and support level of the market.

There are technical analysis tools available such as Moving Averages, Fibonacci levels, Bollinger Bands, and more, which you can use in gold trading.

Analyze Gold Charts

Gold is a highly liquid metal and the prices move quickly, so it’s important to analyze the market charts and determine what’s the trend of the market.

Types of Gold Investment

Here is the list of some common type of gold investments:

Physical Gold

Investors and other individuals purchase gold in the form of gold coins, bars, and jewelry, and trade them when the value goes high.

Gold ETFs (Exchange-Traded Funds)

Gold ETFs is a secure and reliable way to invest in gold asset. Gold ETFs gives privilege to investors to gain higher exposure of gold without even owning it, they are traded like stocks. It is a popular form of investment among investors.

Gold Mining Stocks

Investing in gold mining stocks is also a great way to gain exposure to the gold market profits and risks. Moreover, some of the companies also pay dividends to the stock holders, which is more advantageous compared to the direct investment in gold. However, it’s important to keep in mind that mining companies are also associated with potential risks.

Gold Futures and Options

Gold futures and options may sounds similar, but there are minor differences between these twos. They drive the value of an underlying asset, in this case, it is gold. In Future contracts, the purchaser has the accountability to buy or sell the underlying asset. However, there is no obligation given to buyer for buy/sell in options contract.

Options Contract is a good choice as they are used for leverage and hedging in gold trading, which gives upper hand to the trader.

How to Start Trading Gold Online?

1)Find a Reliable Broker

It’s crucial for beginners to find a convenient and trustworthy broker, from where you can start trading gold. Textrades has all the trading tools available with excellent customer care service and 200+ instruments, where you can trade every kind of asset including gold. We also have a discord channel, where you can interact with other professional traders and learn different strategies.

2)Practice on DEMO Account

Textrades also have demo account, where you can practice different strategies, tools, and instrument and get a good grip on gold market. It will also help you learn how gold market works. Practicing on our demo account will make you familiar with the tools, features, and other enticing indicators on our platform.

3)Start with Low Investment

As we have mentioned, gold is a highly liquid asset and the prices of this metal can move rapidly without any notice. So, it’s better to start trading gold with small investment. It will save you from major losses. In addition, Textrades is one of the cheapest market firms available, we does not charge much as compared to other traders.

4)Learn Everyday

As a trader, it’s important to keep yourself updated with the gold prices and market each day. You can read news, blogs, and watch videos to keep yourself updated with the gold price and future predictions.

Best Strategies for Gold Trading

Here are some of the popular gold trading strategies for beginners:

Supply and Demand Strategy

You may not have heard about this gold trading strategy. It’s a quite unique and simple to understand trading strategy, which you can apply at any market. In this strategy, the traders find aggressive buying and selling in the market and follows it as well. When the market is in bullish position and goes down, enter the “buy” position because the rich investors will push the market up and will help you make huge profits.

Although, if the market is in bearish position, you must wait for the market to go in bullish position, and then enter into “sell” position.

Season Gold Strategy

There are many traditional events such as EID, Diwali, Holi, and New Year push the price of gold, because during these days, the gold is purchased rapidly. Although, gold market do also face a decline in summer because of less sales in the market, which can push the price down. You can buy and sell gold in these seasons to make a handsome amount of profit.

News Based Strategy

This strategy involves reacting to news and events that can impact the gold market, such as economic data releases, geopolitical developments, and central bank announcements. Traders analyze the news and its potential effects on gold prices, then make trading decisions accordingly.

Moving Average Crossover

Moving Average Crossover is a popular indicator and are often used by professional traders in gold trading to make good profits. In this strategy, the traders select two different moving averages based on their time zones. Most of the traders choose 50-day and 100-day MA.

After plotting MA of different time periods, the traders analyze the crossover point of the lines, which have intersected. There are two conditions in this.

• If the short-term MA cross the long-term MA, it indicates a long-term position for gold.
• If the short-term MA fails to cross long-term MA, it indicates a short-term position for gold.

It’s important to keep in mind that these strategies carry risks, where no profit is guaranteed. This strategy is powerful, but it can give you false indications of the market, which can result in major losses.

Conclusion

Gold is a solid-investment in current times, as inflation can rise at any time. Therefore, it’s important to learn gold trading and learn the nuances of it. In the above article, we have described important tips & strategies, and also highlighted how to begin. In addition, Textrades provides exclusive trading tools and indicators, which are effective in any kind of trades.