In this video, we explore the highly popular and volatile market of trading gold, including what drives its price and how to trade it with Capital Com.
The price of gold is one of the most widely traded commodities in the world, attracting traders and investors from different parts of the world. Its popularity can be attributed to its numerous uses, including serving as a hedge against inflation, a store of value in times of market turmoil, and just like any other currency like the Euro or the pound, with its price movements typically inversely related to the US dollar.

For investors who see gold as a hedge against inflation, it serves as a way to offset the rising of prices in the wider economy. In the same vein, during times of market turmoil, where stock markets are falling, investors move their assets into gold, as it is considered to be a safe destination. Being a highly sought-after precious metal, gold has always been a popular investment choice for investors. It has proven to be a reliable commodity in times of economic uncertainties.

However, its influence extends beyond its industrial uses. Gold is also heavily traded by traders hoping to make a profit from the commodity’s volatility. Traders who want to participate in the gold market can trade contracts for difference or CFDs, which track the price of gold based on supply and demand trends in the market.

One advantage of trading CFDs is the availability of leverage. Leverage has become highly popular amongst short-term traders as it provides a small investment that can control much larger financial positions. It helps magnify profits, but traders must practice risk management controls, including stop-loss orders, to prevent incurring bigger losses.

Traders can trade gold in both directions by buying or selling CFDs. If traders expect the price of gold to go up, they can buy. In contrast, if they believe it’s going to drop, they can sell, going short to profit from the projected price drop. Trading gold using CFDs can prove more lucrative if traders have a good understanding of the commodity’s fundamentals.

Given its volatility, it’s no surprise why many traders are attracted to the gold market. In the past year, gold has traded as high as $1,350 per ounce back in April 2018, while it fell to as low as $1,160 per ounce by August 2018. However, gold has bounced back and traded to where it currently is now.

In sum, the gold market attracts investors and traders with different objectives. Although not prone to massive price movements, gold’s volatility can prove profitable to traders who understand the intricacies of the market. Traders must ensure to apply due diligence and risk management controls when trading gold via CFDs to avoid incurring significant losses. Trading gold requires dedication, effort, and discipline to make the most out of potential opportunities.