Gold
Trading
14 September 2022

The Complete Guide to Trading Gold Online With ISA Bullion

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The gold market comes with many opportunities despite its bullish or bearish nature. Many individuals might choose to own the metal. However, Gold trading online offers more financial returns. The process demands speculation of gold prices on equity, futures, and options markets. That said, things don’t always go as planned.

Market enthusiasts fail to maximize gold price fluctuations because of no information. The sector has unique characteristics, so the right tools and skill sets are necessary. That’s where ISA Bullion comes in, and you can use this article to learn how the service works. With our help, you’ll be able to handle gold trading online like a pro.

History of Gold

Gold first emerged as a precious metal with early excavation efforts in placer mines. These locations had alluvial deposits where gold settled at the bottom of streambeds. The river water was run over unshorn sheepskin to sift out gold. It’s a method that was used later on by gold panners. 

Gold was valuable in the ancient world even before it became a currency. The ownership of gold was a sign of power. Gold jewelry was found in the tombs of Djer and Tutankhamun. These were Egyptian pharaohs from 2500 BC and the 14 century. 

The first monetary use of gold happened around 700 B.C. through Lydian merchants. They stamped lumps of 63% gold and 27% silver into “electrum” coins. Which helped Lydian traders amass enviable wealth. The shekel is another early currency form containing gold. Its value in 2020 was worth $500.

In the past 200 years, the search for gold has resulted in mass immigration. Settlements in the United States emerged near gold discovery sites. Its exchange has resulted in thriving cities and shaped the financial industry. The gold standard is an example of the metal’s influence which is bound to keep growing. 

Different Types of Gold

When trading in gold, there are various gold types you can use. These include the following;

Gold Bullion

Gold bullion is the gold storage format used by central banks and world governments. It’s physical gold that’s recognized as 99.5% to 99.9% pure. Mining companies discover and extract gold ore from the earth to create bullion. Then, the gold contents of the ore are separated using high temperatures or chemicals.

Gold bullion is crucial to how gold is traded because it’s a liquid asset. It provides a fast means of getting cash and increases in value over time. Investors who prefer to tangle commodities can buy gold bullion. It exists as physical proof of the individual’s wealth.

Gold Certificates

Gold certificates indicated gold ownership, like stock certificates indicating ownership of company shares. They dominated the U.S. financial scene from 1879 until their frequent use dwindled.

Gold certificates solved the issue of having to carry bullion around. Gold bullion was difficult, making exchanging goods and services a tedious task. The gold certificate proves an individual owns the stated gold amount.

Some banks and investment companies still issue gold certificates. The market regulates its dollar value, specifying the gold amount in ounces. Gold certificate trading also has its downsides. The certificate can become worthless. This evaluation arises if the issuing company becomes bankrupt.  

Gold Futures

Gold futures happen when the buyer agrees to take delivery of a specified gold quantity. The agreement is based on a predetermined price between the parties for goods at a later date. Future contracts are used to cut the price risk of the commodity market. 

Investors in futures contracts can choose to take the long or short position. The long position lets the investor buy gold with the expectation of a price increase. In the short position, the investor sells gold and intends to buy it later for a lower price. 

Gold CFDs

A contract for difference (CFD) lets investors trade on margins. This feature ensures increased exposure to the gold market. Investors buy and sell gold units depending on price changes instead of purchasing the commodity. 

Gold online trading with CFDs has its advantages, one of which is not having to deposit full trade value. It also exempts the investor from stamp duties. But, it’s a trade-off as the CFDs amplify both wins and losses.

Gold ETFs

The exchange-traded fund is a passive instrument that monitors the gold price. It’s a unit in paper or dematerialized form that represents physical gold. For instance, one Gold ETF is equal to 1 gram of gold. 

The instrument is purchased in electronic form and backed by physical gold. Investors can buy and sell it and receive a cash equivalent when they redeem it. Gold ETF holdings are transparent, thanks to direct gold pricing. They also have lower expenses than physical gold investments. 

Gold Swaps

Gold swaps are contracts for exchanging financial instruments. These include currencies, assets, liabilities, and commodities. The agreement involves cash flows that are based on a notional principal amount. 

The swapping of precious metals is known as forwarding swaps with two versions. It can be purchasing a bullion spot and choosing to sell the metal forward. Alternatively, the investor can sell the metal spot and buy the bullion forward. 

Reasons to Trade Gold

Trading in gold can boost your financial standing. But that’s just scratching the surface. Here are more reasons to trade Gold. 

Stable value

Gold has a history of maintaining its value regardless of financial circumstances. As a result, investors can be sure they’re protected from devaluation in uncertain periods. 

Inverse dollar relationship

The value increases as the value of the dollar keeps dropping. So by trading in gold, you’re shielded from currency devaluation. 

Inflation hedge

Gold can protect your finances from steep price increases. When the currency price fails, you can be certain your gold investment will be on the rise.

Portfolio diversification

Trading in gold lets you add more assets to your investment portfolio. In addition, the commodity’s inclusion can reduce risk when combined with stocks and bonds.

Factors to Consider When Trading Gold

These factors should always be examined to successfully navigate gold online trading: 

Supply and Demand

The gold market is not immune to the laws of demand and supply. Investors should know high prices will increase the gold value but reduce demand. Lower prices will reduce supply but increase value. This condition is because of the scarcity of resources. 

Market Volatility

Gold prices are unstable and subject to many factors. These include inflation, global pandemics, and wars. Therefore, understanding the global economic situation should be a priority when trading gold.

Geo-political setting

When trading gold, investors need to understand the geo-political circumstances of gold. In addition, the manner and extent of trading the commodity might differ in each location. Therefore, traders should invest in areas that support gold exchange.

Gold trading strategies

There are various methods for gold trading online. You can choose from any of these;

Evaluating sentiment

You can get information about investor sentiment from the commitment of a trader’s report. The submission contains details from the Commodities Futures Trading Commission. It covers increases and decreases in options contracts and gold futures. Hedge funds and swap dealers hold these instruments.

Technical indicators

Technical indicators help you understand at what level prices stop falling and can’t rise. It also shows where the prices can increase. 

Trend following

Traders can determine a trend by moving averages. Each moving average is a specific period, and you can use any period to create one. Traders can use the same moving averages to locate a short-term downtrend. 

Momentum

The moving average convergence divergence index describes momentum. It subtracts the short-term momentum average from the long-term moving average. The momentum is positive if the change is compared and a MACD crossover occurs. 

Overextended

Using the fast stochastic can let you know when prices are overextended. When it prints a reading above 80, the gold price is overbought. This figure also indicates a potential correction. The price is oversold if it prints below 20 and points to a potential rebound. 

Fundamental Analysis

Your fundamental analysis should examine the dollar’s value. Gold trading online is determined by how much the dollar is worth. If the dollar value reduces, the gold value goes up. This condition is because gold price increases in other currencies. The reverse will be the case with the gold value falling if the dollar value goes up.

How to trade with the ISA Bullion App via Laptop

Use these steps to start your trading journey on the ISA Bullion App:

  • Log in to your Web Dashboard on the ISA Bullion web trader platform
  • Let’s say you wish to trade 1 oz of Gold from the web trader. You will first buy the Gold for eg: you may buy 1 oz. 
  • Once Gold reaches your desired selling price point. You will sell the Gold. 
  • Congratulations. You have sold the Gold at a profit!
  • Your profitable trade is now successful!

How to trade with ISA Bullion’s Mobile App

  • Log in to your user Dashboard via the ISA Bullion Mobile App & select category to trade. In the below screenshot, we clicked on the Gold-Oz category. 
  • Now we’ll click buy XAU to purchase Gold on the stated price. 
  • Confirm your purchase of 1 Oz of Gold
  • Trade has been executed successfully.
  • Once Gold reaches your desired selling price point, now you can easily sell your Gold. See in example below. 
  • Once you sell your Gold, your capital along with your profit will accumulate in your ISA bullion wallet!

As you can see, it is very easy to execute trades with ISA Bullion and literally only takes a min. Transactions happen in real-time and Gold profits can be locked instantly. If you want to get started today, simply download ISA bullion’s mobile app for Android & Apple from here now. 

Gold trading tips

Here are gold trading tips that will always be valuable:

  • Track commercial and industrial demand for gold
  • Keep your gold stock trading options small. 
  • Track cycles and turning points
  • Always use stochastic indicators.
  • Use moving averages

Is Investing in Gold a Wise Decision? 

Gold is a top-rated commodity that acts as an inflation hedge and a portfolio diversifier. That is reason enough for most people to start trading in Gold. Furthermore, unlike Crypto currency and stocks, Gold’s value has never gone down to zero. 

Even more so, it is one of the most stable commodities out there and has made millions of people rich. Even billionaires like Warren Buffet, Elon Musk and Bill Gates heavily invest in Gold because Gold is a reflection of true wealth. 

The purpose of this blog was to guide you on how easy and convenient Gold trading is with the ISA Bullion platform. It literally takes a minute to execute trades and lock in profits making your path to financial scalability even easier. 

Open an account with ISA Bullion today to start gold trading online with us. Through this article, we hope you’ll achieve financial security in no time. If you have any questions regarding Gold trading or Gold related queries, kindly get in touch with our team now

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