Gold and other precious metals are assets that are both tangible and liquid (i.e. easily traded).The usual benchmark for the Spot price of gold is known as the London Gold Fixing, a twice-daily (telephone) meeting of representatives from five bullion-trading firms. Furthermore, there is active gold trading based on the intra-day Gold spot price, derived from gold-trading markets around the world as they open and close throughout the day. Like all investments and commodities, the Spot price of gold is ultimately driven by supply and demand.
Individuals who are interested in trading gold are making a good choice, particularly in these troubled economic times: Gold typically holds its value, andgold-trading platforms (particularly online gold-trading platforms) have proliferated in recent years, making it easier than ever to trade gold. But before you get started, you will need to understand the ways in which you can trade gold.
With Spot Gold Margin Trading, you can buy / short sell gold when market conditions are favourable to maximize your potential returns. If the gold price appreciates after you have made a purchase, you will make a profit. If the gold price depreciates after you have made a purchase, you will suffer a loss. Conversely, if the gold price depreciates after you sell gold, you will make a profit, and if the gold price appreciates after you sell gold, you will suffer a loss. In short, you can earn either way, whether the economic condition will go up or down.
Spot Gold Margin Trading is also called as a gold option-related exchange-traded fund (ETF). ETFs are pools of investments that trade on an exchange like stocks. Typically, gold ETFs are intended to track a percentage of an ounce of gold, so in that sense they are a way to trade physical gold. While ETFs can be good for speculators who wish to buy gold or sell it short, there are downsides. Many gold ETFs are backed 100% by physical gold (such as bars and bullion), and are designed to track the gold price almost perfectly.
Note that spot gold trading are used by speculators or people who are used to stocks and currency trading to make money on swings in the price of gold. But there are also different ways to minimize the risk and make it calculated such as hedge, stop loss, cut loss, etc.