The precious metal’s role as a haven in times of economic turmoil and political unrest makes it popular among investors who seek diversification and profit from the commodity’s price movements. While physical ownership remains popular, gold traders can also amplify their returns with futures contracts and exchange-traded funds (ETFs). How to trade gold.

Trading on the spot market – buying or selling gold for current prices – offers direct exposure to the commodity’s price. You can use tools like stop-loss orders to manage risk and stay in profit or limit your losses if the price goes against you.

How to Trade Gold: Best Strategies for Gold Investing

Investing in physical gold – coins, bars and jewelry – requires storing and protecting it securely. Moreover, premiums and fees can significantly diminish your profits when selling it. For these reasons, many investors prefer to trade commodities via derivatives, such as CFDs on the spot market or ETFs.

These instruments leverage the spot market to provide a return that can be magnified by up to 50x. They track the performance of physical gold, gold options or a basket of gold stocks. As a result, your position will rise or fall in line with changes in the respective index.

The underlying asset’s price is influenced by numerous factors, including the Fed’s monetary policy, global economic conditions and geopolitics. Traders should understand the fundamental drivers of the gold price to better anticipate its direction.