Gold is one of the most valuable resources on Earth, and it has been like that for thousands of years. Investing in gold in South Africa or trading gold is a great idea. It all comes down to finding the right gold trading strategy and narrowing down how you can generate the most profits.
What we need to realize before finding a gold trading platform is that gold has been volatile price-wise for many years. But unlike crypto that has true volatility, historically gold value always tends to go up. So itโs a great idea to buy, hold and then trade gold. Sure, you need to watch the gold prices and narrow down the right time to sell. But in general, if you check the gold trading chart, you will find it easy to identify the right time to sell and make a profit.
What kind of gold trading can you do?
The thing that a lot of people donโt know is that you can trade gold in a multitude of ways. Sure, you have gold coins and other stuff like that, but you can also trade in many other formats. Here are the main types of gold trading that you can do.
- Gold bullion trading is very common, usually these bullions are designed to help store gold value, basically. If you want to safeguard your wealth and then sell the gold for a profit later on, these bullions are a very good option. As we said, historically the prices go up, so itโs actually a very good investment.
- Spot gold trading is also interesting, because you buy on the spot and usually at a very good deal. The idea here is that you buy and sell right away. You donโt even have to take ownership of the gold, which is a great option.
- Gold futures are actually a great option. These contracts help you exchange gold for a fixed price sometime in the future. Whatโs great is that you set the price now, so you know that you will be getting a good profit. Plus, even if the market changes for some reason, you donโt really have to worry since the price is already set.
- Gold options are similar to futures, but you donโt have to execute that trade when you are buying. You can exchange the futures or physical gold at a certain date.
- Gold stocks are also a very good idea when it comes to trading gold. Granted, itโs more of an indirect approach, but it certainly works. Here you can have quite a bit of volatility, but thatโs to be expected.
- Gold ETFS or exchange traded funds are tracking the movement of shares of gold traded publicly, and you can get a good profit from these trades. Unlike other options, gold ETFS are passive investments. You just replicate the market returns instead of trying to outperform them. But you are getting a very good ROI, and that alone can be incredibly powerful.
Regardless of how you want to trade gold, thereโs no denying that you have lots of amazing options. As always, it comes down to the gold trading strategy that fits your needs. Plus, it never hurts to try out different strategies, as you narrow down what works for you and what conveys the best results.
What affects the price of gold?
Before you start looking for a gold trading platform, you need to know what impacts gold prices. The reason is simple, based on these criteria, you will know when itโs the right time to invest in gold, but also the right time to avoid any trades. Sometimes, gold prices will be lower, and thatโs when you want to buy, not sell. Hereโs what affects the price of gold.
- The US dollar will always affect the price of gold. When the US dollar falls in value, usually the price of gold will go up. Thatโs because people will always try to find a way to safeguard their investment. So yes, you always want to check the US dollar and its performance, as it might have a positive impact on gold value.
- Interest rates also tend to matter, because gold prices fall if the interest rates go up. When that happens, investors will focus more on fixed income assets and stocks instead of buying gold.
- Mining production also matters, in this case the overall production has declined, since most of the gold has already been dug up. Finding new gold sources requires additional, expensive tech, and that can raise up prices for gold.
- Obviously, global demand is very important. There are certain times during the year when gold is in higher demand. Historically though, gold is known to bring a large demand, and thatโs the thing to keep in mind.
- We shouldnโt dismiss other factors like political instability or financial stress. When people are dealing with a bad economic or political situation in their country, gold investments tend to be the most appealing option. As we said, gold retains its value or, most of the time, it will generate a profit if you sell it later on.
If you are serious about trading gold, be it physical gold or gold ETFS among others, then you have to perform your due diligence. Learn more about the gold selling options, where to buy and sell, but also whatโs the right time to perform those actions. People will always find ways to make money with gold, be it from futures contracts, gold bars or a variety of trading strategies. Just make sure that you find the best approach which fits your trading style.
Ways to get started with gold trading in South Africa
Now that you know how important it is to trade gold, you have to figure out where and how you should start trading. Thankfully, thereโs no rush, and thus you should always focus on trading the right way. The best method you can use in this situation is always to find a reliable gold trading platform and use their tools and resources. There are a variety of gold trading platforms in South Africa, from IG to Avatrade, SA Bullion, Banxso, PU Prime, HFM and many others.
How to choose a reliable gold trading platform:
- Check their track record and customer reviews
- Assess their prices and compare them to the market average
- Study features like ease of use, account management, interface, etc.
- Do they have any fees? Will you be forced to pay additional fees for your trades?
- Is there automatic trading or do you need to manually trade? Some people want manual trades, while others appreciate automatic features, if available.
- Find any other details like customer service, reliability, minimum deposits, etc.
These criteria are very helpful if you want to trade gold, be it locally or on international markets. You also want to see what gold mining companies are bringing, if the gold supply is high or not, etc. Yes, gold production will also play a factor. But in the end, you do want to assess the reliability of the platform you use. Trading gold always comes with a little bit of risk, unless the price is pre-determined. However, gold prices are fluctuating, so you always want to get the best possible deal.
Sign up on the trading platform
After you select the right gold trading platform, you want to focus on creating an account. Itโs a good idea to search online, because sometimes a gold trading platform might actually bring you certain bonuses. Thatโs why itโs a very good idea to assess everything and see where you can get the best deal/results. In doing so, you will have a much better experience, all without having to worry about any downsides.
Identify the right type of gold trading opportunity
Ideally, you want to find a good type of gold trading system. As we said, you can do an expert analysis and see when to trade, based on the prices. You can also study the technical indicators. And yes, depending on the situation, you can also start using trading alerts. Those can be incredibly powerful, and they can make it easy to save a significant amount of effort and time. Plus, alerts can be a great way for you to know exactly when to trade or to avoid any potential losses.
Opening your first trade
Once you find the best trading opportunity, you can start opening your first trade. Depending on the gold trading platform, you can choose from different options. But in general, what you need to do is to search for gold, select spot or any option you are interested in.
After that, you select the trade size, and you either buy or sell. Of course, it makes sense to study the platform and even initiate a very small trade first. That way, if there are any issues, you wonโt have to worry that much. Some of these trading platforms also have demo accounts, so you might want to take advantage of that. Knowing how to ensure that you are using the platform correctly can be very important, and certainly a thing to consider.
Should you do a long or short trade on gold?
Thatโs the thing, you always want to have an idea of how gold traded in the recent days or weeks. That will give you a good understanding of the market and you will find it much easier to narrow down when you should buy/sell. A lot of people try to just get rid of their gold and sell it quickly. Donโt do that. Instead, study the market and see if it is a good time to sell. Naturally, you want to make a profit on your investment. Sometimes you will have to wait until you make a profit, other times less so.
Monitor the trade and close the position
The advantage of using a gold trading platform is that it always allows you to monitor your profit and loss. That way you know exactly when you generate a profit, or when a trade is not doing the way you want. You can close the trade when you know you will be getting a good profit. And thatโs the thing, you donโt want to rush, but at the same time, you want to ensure that you are actually earning something from the trade.
So it makes sense to keep the position open, itโs a very good gold trading strategy. And at the same time, you want to stay up to date with the news. That way you will have a very good understanding of the market, when you should be closing and when you should wait a bit more before you take a decision. All these things matter, and can have a major influence on your trade.
The most important thing to focus on when trading gold in South Africa is studying the market. And, as we said, check the factors mentioned above, as those can move the market one way or another too. Once you know what affects the market, you will have a much better idea of what you can expect and what can give you a very good return. Plus, make sure that you donโt just rush into a trade. Performing your due diligence is the ideal way to trade gold, because it helps keep risks under control. Otherwise, you might end up with lots of risks, and that alone will become a problem.
Conclusion
As you can see, trading gold is very easy these days, as there are many platforms in South Africa that will help you trade gold quickly. However, you do want to check the platform, their terms and conditions, fees and other relevant info. Sometimes, you might even have deals or discounts too, depending on the platform. Plus, even if you are registered on such a platform, you donโt have to trade right away. Get used with their tools, features, and when you feel confident, you can start trading gold. That way to alleviate any risks, while also ensuring you will get a very good deal!
