Gold Trading

Top 10 Tips For Trading Gold In 2023

Aside from oil, gold is the most widely used commodity in the world. It is traded as a physical bullion, on the stock market, on the forex market and via jewellery such as necklaces and rings. What drives the price of it, though and how do you use this to your advantage?


For those well-versed in trading commodities, we know you cannot underestimate its impact on the overall market. For over half a Century, gold has been used as a reliable inflation hedge. Many of the largest world economies hold vast sums in reserves. But what is gold trading?

Although the importance has diminished somewhat in recent years, countries still hold tons of this precious metal as a store of value. Before we establish the top tips for trading gold in 2023, we will unpack just how pivotal it is to a modern-day and well-functioning economy. Forex gold trading tips vary depending on your method, but this is something we will also go through in detail for you today.

Why Is Gold Important?

Gold has been a symbol of wealth and power for thousands of years. The Ancient Egyptians were mesmerised by the quality and far-reaching utility it had in their empire. As a result, gold dealing was one of the most prominent components of their economy. 

It is a precious metal that has been utilised as a transaction method and a unit of investment for centuries. Other metals, such as silver, are traded on global markets too, but gold remains King. 

Gold is a tangible asset, and although other commodities such as oil and wheat are tangible, gold still maintains a multi-purpose in today’s society. Some examples include

  • Currency – such as coins or collectable medallions
  • Jewellery – Rings, necklaces, bracelets etc
  • Investment – whether it be physical bullion or a currency pair
  • Homeware products and art – plates, golden toilets and sculptures.

Due to the enormous range of available uses, gold still has tremendous value. Society is heading towards digital currencies and cryptocurrencies with less emphasis on physical cash. However, gold has maintained its presence as the global store of value in times of economic uncertainty. Even today, it is one of the most valuable commodities in the world. This is something we will discuss in more detail in today’s article.

# Tip 1 – Pay Attention To The News

As we discussed in our introduction, gold has been essential to global economics and trade since ancient times. As a result, it is an asset that is highly sought as a hedge against economic and political uncertainty, especially in times of high inflation. 

Gold is widely considered an inflationary hedge because the value is variable against the US Dollar. For example, if the Dollar loses value from the effects of inflation, gold tends to become more expensive. For example, the biggest buyer of gold last year was Turkey. In light of inflationary issues and economic uncertainty, they became the world’s biggest buyer.

The gold standard, used to determine currency exchange rates, has changed the landscape of the global economy forever. Given that jewellery is still highly sought after and carries significant value, the multi-faceted valuation of gold keeps the price in demand.

#Tip 2 – Choose Your Method

When it comes to trading gold, there isn’t one set method. Gold online trading can take multiple forms. For example, you could take to the internet to find out how to trade gold in forex. If you want to know where to trade gold, you can find multiple dealers who can give you a quote. 

If you are trading gold, you must factor in any overhead costs. For instance, if you are looking to purchase physical bullions, you will need to buy insurance, and you will also need to consider the storage costs. As you can imagine, this isn’t the optimum method commodity traders use. Trading gold in forex is a more popular method. It is marketed as (XAU/USD). 

Trading gold online takes many forms. You can trade in gold online through

  • A physical purchase
  • A stock market investment
  • Purchasing jewellery and allowing the asset to appreciate

Finding a reputable provider is essential. Ensuring you shop around before you invest your cash is critical. Gold trading is less popular than it used to be, but plenty of dealers online will look to provide you with a fair price.

You can do it indirectly if you want to know how to trade gold in stock market terms. If you do not fancy the traditional approach of physical ownership and aren’t too keen on forex, you can invest in companies that operate within the gold supply chain. This includes companies that mine gold or transport it.

# Tip 3 – Understand The Market

Irrespective of whether you are trading stocks, forex or cryptocurrency, you need to make sure that you understand the market you are involved in. Trading gold falls into the same category. This can range from knowing which countries are producing the most gold to who is buying the most to how it is performing over a specific period. 

It is a suitable start gold trading knowing that it is used as an inflation hedge. But what else moves the gold market, and when is a good time to invest? Where is gold traded? How is gold traded in other continents? If you can answer these questions confidently and with a degree of knowledge, you are on the right track. Knowing how to trade gold effectively sets professional traders apart from traders who don’t do it as a full-time job.

Tip #4 – Diversify

Holding a commodity like gold is contingent on many variables. As it is used as an effective inflation hedge, it is wise to preserve other assets alongside gold. If the stock market and economy are doing well across Western economies, the value of your gold investment will naturally decrease. 

However, in a sudden market downturn, gold will help you insulate yourself from the economic downturn. As a general rule, many professional traders will recommend a diverse portfolio so that you know what drives each market. 

Tip #5 – Effective Risk Management

Diversifying is just one of many effective risk management tools. Understanding how volatile any asset can be will help you in your journey. Irrespective of whether you are looking to trade over a short period or a more extended period, risk management will help you overall. 

Risk management is the essential tip you should take away from today’s piece. You can apply the theory across the board, not just when trading gold.

Other methods, such as Dollar-cost averaging and take profit and stop loss limits, help you manage any possible losses. A combination of risk management tools will help you in the long run as it allows you to insulate yourself from negative emotions. They can cause you to revenge trade and lose substantial sums of money.

Trading gold is the biggest market when it comes to trading precious metals. It would be ridiculous to suggest that you only implement these strategies if you are trading in gold. Ensuring you have a system across a range of assets is critical. If you are trading gold in forex, trading gold stocks indirectly, or learning to trade gold forex indicators for the first time, managing your risk is vital. 

Tip #6 – Don’t Overleverage

When starting trading, you should not use complex instruments such as futures to amplify your returns. You can find more information on our specific page, which details futures trading. Essentially, you can use the leverage of anywhere between 1 and 100 to multiply your trade. If you’re trading gold as a forex pair, you will be able to leverage your position.

Although it helps return a handsome profit, you can also liquidate your position and lose all of your investment. Therefore, it is only recommended for traders if they are professionals. Full-time traders understand the risk of losing their investment and not getting it back.

Risk management is about knowing your limitations and protecting yourself from more dangerous aspects of trading. Due diligence is vital. Setting up stop loss and taking profits are examples of effectively managing risk before executing your position.

However, if you are looking for trading methods, sticking to swing trading is highly recommended for novice traders. More risky options like futures and options are specific to institutional investors. 

Tip #7 – Make A Note Of The Exchange Rate

XAU’s central currency pair is with the US Dollar. The gold trading market often focuses on this pairing as the leading price action indicator. Measuring the value of gold also factors in the price of the US Dollar against other currencies. If you are trading gold from another country, you will need to be aware of the three-way exchange between your currency, the Dollar and gold. 

For example, if the price of gold rises 10% in the space of 3 months, but the inflation rate in the US has also risen 10% in that period, your investment has not increased in absolute value. As a result, some traders will use a weak dollar to stock up on gold and then sell it once the Dollar bounces back. 

Knowing when to sell forex pairs is critical if this is your chosen method. In addition, learning how to trade gold across various platforms will help you understand the variables that move the price. 

#Tip 8 – Don’t Use Money You Can’t Afford To Lose

We could have filed this tip within the risk management tip, but we thought it was too important to leave it as a side note. Using your own money is risky business. It doesn’t matter if you are trading gold, other commodities, stocks or cryptocurrency. It is vital that you only use money that you can afford to lose. 

Ideally, you want to avoid being in a position where you lose any money. However, if you are trading gold on the forex market and the forex market crashes, if you do lose your money, you want to avoid being in a position where you end up in financial difficulty. 

Using the money you can afford to lose allows you to keep negative emotional trading at bay as much as possible and ensures you are not losing too much money.

#Tip 9 – Research Your Plan

If you are looking to make a short-term profit when trading gold, you need to be aware of the factors that could cause you to lose money. Short-term trading strategies, such as scalping, differ wildly from long-term strategies, such as swing trading. In addition, other variables will impact short-term prices when compared to long-term ones. 

In addition, no set strategy will guarantee you a return. Ultimately, developing a plan that plays to your strengths, your trading psychology and a market you understand are all critical components to a method that ensures trading gold is a profitable avenue for you.

#Tip 10 – Trade During New York Hours

It isn’t just a case of trading gold effectively. Knowing how to do gold trading at the optimum stage of the day is also vital. The highest amount of volume occurs during New York trading hours. The same applies to other markets, such as the stock exchange, which is only open during business hours in New York.

As the world’s financial capital, New York plays a pivotal role in the price of many assets and the direction of multiple markets. For example, as discussed in today’s article, the US dollar is the central gold pairing in forex. Although gold trades occur in other forms, you will find the most volume during these hours. 


If you take away just one thing from today’s article, ensure that it is effective risk management. Ideally, implementing all of the above is essential to start on a solid footing before trading gold. 

However, you could still lose money even with the best knowledge, adequate due diligence and a simple risk management strategy. This is because the market is unpredictable. 

Even though it may have operated in a specific way in the past doesn’t mean there’s a guarantee it will do the same again in the future. But if you do all of these things before entering your trade, you follow the same methods professional traders use.

There isn’t a guaranteed method that works for trading gold. However, finding your feet in the market whilst taking the necessary time and effort to understand what you are trading is far more valuable than trying to turn a quick profit in a market that isn’t designed for novices to get rich quickly.

Gold Trading Silver Trading

Precious Metals Trading | How To Trade Precious Metals

Investors trade precious metals because they are valuable, especially with worsening economic conditions. They buy them for investment value, wealth preservation and, of course, bragging rights. Several precious metals are mined globally. However, we generally focus on the ‘Big Four’ (gold, silver, platinum and palladium).


Henry Hazlitt once said, “If precious metals had been abundant, they would not have been precious.” This is the point of precious metal trading, a market that has truly proven its mettle (no pun intended). 

Investors trade precious metals because they are valuable, especially with worsening economic conditions. They buy them for investment value, wealth preservation and, of course, bragging rights. 

Several precious metals are mined globally. However, we generally focus on the ‘Big Four’ (gold, silver, platinum and palladium). This is despite having rarer precious metals like rhodium (the rarest of them all), ruthenium, and osmium. 

The Big Four are the most accessible and practical of the lot. So, this article will focus on how to trade precious metals of these kinds.

Trading precious metals: what is it?

It’s all well and good that you wish to be a precious metals trader. But let’s first define a precious metal. A precious or noble metal is a rare, naturally forming substance from the Earth’s crust. Rarity is one of the standard features of these commodities, making them difficult to mine.

Because they generate massive demand, they have much higher economic value than other common or base metals like iron, lead and copper. Unlike their counterparts, precious metals in their natural state technically don’t rust. 

Also, they have a lustrous texture, another factor contributing to their high-value social and economic status. These are the main reasons we trade precious metals. However, what do we use these commodities for? Let’s take a look.

Gold (Au)

Although gold is not the rarest or priciest metal, it is the most revered. Heck, we even had a gold standard at some point in history. The world has been fascinated with trading metals in gold form since the beginning of civilization.

Gold has several favorable qualities which make it a highly desirable metal. It:

  • Conducts heat and electricity well
  • Is very ductile or pliable (an ounce can be stretched into 80 km of gold wire)
  • Is reflective of heat and light

Last but not least, gold, this metal is simply beautiful. Whether you emboss, hammer, twist or cast it, its orange-yellow colour remains appealing. Here is a sample of the industries where gold is used:

  • Jewelry
  • Coinage
  • Aerospace
  • Electronics
  • Dentistry
  • Medicine

Silver (Ag)

Silver is, of course, not a particularly rare commodity when we want to trade precious metals. Still, it is the second-most popular commodity after gold and has many practical benefits. Like gold, silver is ductile, durable, corrosion-resistant and lustrous.

Yet, what sets silver apart is that it has the greatest thermal and electrical conductivity among all metals. Here are a few of the practical applications of this commodity:

  • Electronics
  • Jewelry/silverware
  • Photography
  • Coinage
  • Mechanical or vehicle parts
  • Glass-making
  • Medicine

Platinum (Pt)

Few people think of platinum when they trade precious metals. Yet, it is the second-rarest of the lot, with roughly 90% of this commodity found only in South Africa.

Platinum is sometimes referred to as ‘white gold’, given its silverish-white appearance. Not only that, this commodity possesses outstanding economic value, like gold. Platinum is very unreactive, ductile, and soft, resulting in numerous industrial uses:

  • Chemicals
  • Jewelry
  • Electronics
  • Petroleum
  • Automotives
  • Glass

Palladium (Pd)

Palladium is another rarely-mentioned commodity when it comes to precious metal traders. While it is less scarce than gold and platinum, it is slightly rarer than silver. It is a soft silver-white metal that resembles platinum and shares many characteristics.

Interestingly, over 50% of palladium’s supply is used for exhaust emissions controls in automotive industries. Here are some of the metal’s other usages:

  • Medicine
  • Deintry
  • Groundwater treatment
  • Jewelry
  • Chemical applications
  • Hydrogen purification

The different ways to trade precious metals

There are generally three methods to trading metals. Before we dive into them in more detail, the table below summarises the pros/cons for each.

Bullion trading– Physical and pure ownership- No counterparty risk- May be useful in hyperinflation scenarios and wealth preservation- Simpler to understand-– Very expensive- Not liquid- Storage costs apply- Bulky- Doesn’t provide any yield
Mutual/exchange-traded funds– Online-traded- Best for passive investing- Diversification- Lower fees– Only suitable for long-term investors- Reduced profit yields
Derivatives– Online-traded- Leveraged product- More accessible- No physical ownership of the asset- Potential for the most gains- Very liquid– Over-leveraging can result in massive losses- More complex to understand

Bullion trading

Gold and silver trading

Here, we typically refer to gold and silver in nearly 100%-pure bar form. However, you can also purchase platinum and palladium as bars as well. Central banks popularly hold bullion to settle their international debt. 

Investors also keep it in case of potential hyperinflation events. Precious metal traders consider this route the purest way to own this commodity. The primary reason is there are no ties to any third-party financial system like a bank, broker or exchange. So, there is no counterparty risk.

On the downside, bullion trading isn’t technically an investment. Thus it doesn’t offer any passive income because it is used more as an inflationary hedge. Of course, it is also very expensive, requires extra costly storage and is challenging to resell.

The other alternative bullion trading is rare and collectable coins owned by private dealers. This is perhaps the most investment-worthy approach to trade precious metals in their physical form. 

Unlike bullion, it is less bulky and typically doesn’t need elaborate storage. However, rare coins are also quite costly and difficult to resell.

Mutual/exchange-traded funds

Bullion trading

The next approach to trade precious metals is through mutual funds or ETFs (exchange-traded funds). Although these have some distinctions, the common theme is that each is an index of other metal-related instruments.

For instance, the abrdn Physical Precious Metals Basket Shares ETF (GLTR) is an index to trade precious metals. It is based on the prices of gold, silver, platinum and palladium bullion collectively. Yet, the majority of funds for precious metals track the price of gold and silver. There are fewer individual ones for platinum and palladium.

The first purpose of funds is easier diversification. For instance, the GLTR contains four metals in one, meaning you don’t need to invest in each market individually. The second benefit of funds, primarily ETFs, is they are designed for long-term investing.

Like derivatives (which we’ll cover next), we trade funds online, meaning there is no need to own any commodity physically.

On the downside, because funds are passive and long-term in nature, you typically generate less profit when you trade precious metals in this fashion compared to derivatives.


Derivatives image

Let’s now cover the most popular and accessible avenue to trade precious metals. A derivative is an online-traded financial contract whose value is taken or derived from an underlying asset. For instance, the XAU/USD forex pair is the price of gold against the US dollar.

As with funds, we don’t own the traded physical asset. Instead, the broker settles the difference by crediting your account (if the position is profitable) or debiting it (if it is a loss). This is also why a derivative is called a CFD, contract for difference.

The most outstanding feature of derivatives is leverage or margin. This simply means you can open far larger positions with a smaller balance. Therefore, derivatives can provide the most significant returns in precious metals trading in a relatively short period (but also the worst losses).

This is especially true with forex margin given its magnitude. Another benefit is that you can trade precious metals in many markets like crypto, forex, options, and futures, among others. 

The next advantage of derivatives is they are very liquid. This means you can buy and sell in seconds, which isn’t possible with physical ownership. Lastly, derivatives suit all time-frames of trading, from short-term to long-term.

Overall, it is arguably the best way to trade precious metals.


The longevity of any financial market lies in its real-world practicality. Aside from the beauty aspect, precious metals trading is a component of many industrial usages. This means there will always be demand for gold, silver, platinum and palladium.

The perception of these commodities being safe havens and storers of value remains, although this has been challenged in the last few decades. However, you don’t have to only trade precious metals; they can form part of your diversified portfolio.

Our final point is that the metals trading market can be quite volatile, as with any financial security. So, keep this in mind and invest cautiously.