Gold Trading

Gold trading is highly popular among investors and gold is one of the most widely tradedcommodities on the market. Yet, the majority of investors can’t distinguish between the various financial vehicles offered and don’t know much about the gold market in general. We at CMTrading are here to help! 

Trade Gold in South Africa

South Africa has been one of the top 10 largest gold exports since the very beginning, so it shouldn’t be too surprising that gold trading is extremely common among South Africans.

The most important advantage about online gold trading is that it doesn’t involve physical gold trades, but rather it allows investors to buy and sell through options and gold shares. In addition to that, it’s very convenient as it’s a 24/7 market. You don’t have to trade gold in the traditional way anymore. The market has changed considerably, and with legislation amendments, it is now possible to trade this commodity through CFDs, which you can access with CMTrading. 

Why is trading gold popular?

Gold is a highly volatile market, which means that the potential growth is especially high. Gold is still considered a safe-haven asset in times of economic crisis and is the investment instrument of choice for periods of high inflation.

Production of gold is more or less sitting at its limit, while at the same time it is heavily influenced by the forces of supply and demand. 

Gold trading is a stalwart of the online trading market and has been for decades.  

Not too long ago, trading gold was difficult as you had to physically procure and sell the rare metal. Today, you can gain exposure to the commodity markets and generate returns from movements in gold prices with CFDs (Contract for Differences). This is a very convenient approach to gold trading as it’s a 24/7 market that provides traders with the ability to speculate on the price of gold and profit regardless of the market direction.  

Gold remains volatile as it’s heavily dependent on supply and demand. This means, however, that the potential growth is likewise high. Experts believe the production of gold is at its limit, though many companies are seeking alternative locations for seams such as in the deep sea. It’s still considered safer than trading forex, which can be significantly more volatile and remains the instrument of choice during periods of high inflation. 

What influences Gold prices?

There are many factors that influence gold trading prices. Perhaps the most well-known is uncertainty. People tend to run to gold as a hedge product in times of high inflation and uncertainty. But we at CMTrading believe it’s far from being the only factor.

Monetary policy has a profound influence too. Gold trading becomes attractive when the opportunity cost of forgoing interest-based assets gets low. 

Economic data is another big issue. Jobs reports, wage and manufacturing data and GDP growth has a massive impact on how and where the gold price moves. Strong economies tend to push gold lower, while weak ones lift it up.

As we mentioned above, supply and demand have a big influence too. Inflation, or the rising cost of goods, also push gold prices higher. Inflation usually means economic growth and expansion. The push-pull between interest rates and inflation creates a market conducive to gold trading. 

The movement of certain currencies can also have an effect on the gold market. This mainly applies to the US dollar, as that’s how gold is listed. Falling dollar values tend to push gold prices up.

Remember that these sorts of moves are primarily fear-based, and thus hard to predict. 

Like any commodity, many factors can influence the gold price on the global stage, the biggest of which is uncertainty. Investors turn to gold during times of high inflation and uncertainty, such as during the current global pandemic.  

Global monetary policy has a huge influence too as well as economic issues. Strong economies push the price of gold lower, while during a recession it’s common for prices to rise.  

The movement of certain currencies, such as the US dollar, will drive the price of the gold market. In 2021, the US has issued billions in COVID19 stimulus and loans, and as a result, the dollar, being already stretched thin, is under severe strain in 2022. This is one of the biggest contributors to the rising gold prices. When the global economy is down, gold goes up; it’s a good hedge against recession and economic uncertainty. It’s also a great way to diversify your portfolio. 

Gold trading is an interesting stalwart of the trading market. With CMTrading you get easy access to the gold market, as well as detailed information to help you make the right trades at the right time. 

How to take advantage of opportunities in gold?  

So, the gold price could breach the all-important $2,000 an ounce barrier but you’re unsure how to take advantage of this? 

CMTrading is offering an amazing package of unique tools and services to place the power of gold trading in your hands.  

Take advantage of free trading signals with fundamental and technical analysis carried out by CMTrading’s expert analysts daily. Get access to unmatched trading conditions including low trading fees and powerful leverage.  

Top gold trading tips:   

  • Consider whether markets are at risk  
  • Assess the performance of the US Dollar against that of gold   
  • Keep track of central bank gold reserves  
  • Research the demand for gold jewelry and cosmetics  
  • Research the current industrial demand for gold  
  • Try to identify potential supply disruptions 
Discover more opportunities with CMTrading  

CMTrading is one of the largest and best-performing brokers in Africa. You can join a community of more than 1 million clients that utilize CMTrading’s award-winning platform to trade and invest in the financial markets.  

Get access to a diverse range of tradable assets such as currency pairs, oil, and gold as well as stocks, indices, and cryptocurrencies under an award-winning platform.  

Discover the complete education package when you open a live trading account with us.