How To Trade Gold: The Best Possible Way

Gold became a method of payment that was widely adopted throughout a variety of cultures and civilisations. Today, it is still a reliable store of value against inflation and is very valuable. We will look at how to trade gold and the various avenues you can pursue if you are looking for where to trade gold.

6 min read


The initial discovery of gold was over 4,000 years ago. Historians have documented that the Egyptian alchemist Zosimos of Panopolis was the first to find pure gold. The Egyptians were the first civilisation to use it as a payment method and to trade gold as an asset. Nubia was the first gold-bearing region in Egypt, and it resulted in mining on a mass scale. Gold trades became more common once certified and authorised as a currency. 

The Egyptians didn’t just use it for currency; it was also used, like it is today, to produce necklaces, bracelets and rings. However, the Egyptians also used it to build monuments paying homage to their leaders and also used it to honour them in death. Obviously, the gold trade in Egypt was far more primitive than today’s sophisticated global market. Today we will explain the gold trade’s pros and cons. Obviously, the gold trade in Egypt was far more primitive than today’s sophisticated global market. Today we will explain the gold trade’s pros and cons.

Gold became a method of payment that was widely adopted throughout a variety of cultures and civilisations. Today, it is still a reliable store of value against inflation and is very valuable. We will look at how to trade gold and the various avenues you can pursue if you are looking for where to trade gold. This includes trading gold online, how to trade gold in stock market and gold trading forex.

What Is Gold Trading?

Gold is one of the most integral and widely used commodities on Earth. It moves in line with a handful of market variables. It also correlates with other precious metals markets, such as silver. As we discussed in the introduction, it is a reliable inflation hedge. Many beginner traders will wonder what is gold trading for. 

The simple answer is that investors want to invest in an asset that safeguards their liquid investments from price depreciation. Gold often mitigates this, as it derives its value from the dollar and is considered a relatively scarce commodity, despite its widescale availability.

Factoring in these three factors on board will help you navigate the market more easily:

  • Supply and demand theory is the bedrock of economics and markets. Trading gold ascribes to this theory too, and there are driving factors behind the price. For instance, over 50% of the demand for this precious metal is propelled by the manufacture of jewellery.
  • Other than the big currency pairs like Euros/Dollars and the Great British Pound, gold pairs see the most activity. Due to the considerable trade in foreign currency markets, you will always be able to buy and sell at your chosen price. Trading gold has benefitted from the advances in digital trading too.
  • Unlike other investments, market uncertainty can signal positive news for those who are looking to trade gold or have already begun to trade gold. It can work both ways, though. If overall market conditions are stable, investors will likely sell their positions to invest in other assets.

How Is Gold Traded?

You can trade gold in many forms. One of the simplest ways to trade gold, other than by purchasing it, of course, is to invest in a gold ETF (exchange-traded fund) or perform other methods of online trading gold. This allows you the flexibility and exposure to enter the market without purchasing gold physically. We will explore this in more detail later on in the article.

Other items, such as jewellery, are often seen as both a gift and an investment. Gold can be an appreciating asset, depending on the item’s quality. However, this is something we will explain in further detail as well. The ways in which people trade gold vary. Plenty of institutional investors (hedge funds and investment banks) use a riskier and more complex method of trading called futures and options. 

This type of investment is speculative. Options trading isn’t considered a viable method of trading for a beginner. Generally speaking, there are four additional methods to invest in gold and options trading.

Gold Bullion

If you are looking to purchase a gold bullion physically, it will set you back at least $1,000. It could also be considerably higher depending on the market conditions when you invest. When investing via this method, it is pivotal to use a company with a proven track record that can store it safely for you. However, the internet has easier ways to trade all types of assets. Purchasing a bullion can be a fairly dated method of gold trading.

Gold bars

Gold ETFs

Investing in gold ETFs provides you access to the market without purchasing the bullion. The combination of being able to invest in gold and having the liquidity available to buy and sell it whenever you want is a key selling point of a gold ETF. One of the main types of gold ETFs is an index fund.

The key thing to remember here is that you aren’t technically buying gold. You are investing in funds that correlate with the market. For this reason, your investment will not match up with the price of gold on some occasions.


Gold coins are in high supply in countries that use them as their currency. However, this is due to mass production, and they have a set value. Specialist coins that have unique designs, such as the American Gold Eagle coin, can be worth between $5 and $50. Generally considered a collector’s item, it will likely rise in value if you obtain one of these coins as an investment.

golden coins

Invest In Companies That Produce Gold

Like an ETF, this option provides flexibility and liquidity when selling your asset. As far as gold dealing goes, this is a relatively indirect way of trading the asset. Professional traders encourage having a varied portfolio. By investing in companies that produce gold, you are diversifying your investment and not putting all of your investment into a physical form like a gold coin or gold bullion. As we have detailed in this section, there are several places where to trade in gold.

Investing in companies that trade gold and mass produce it will supplement your gold investment. If they are in a position where they are making money, it is likely that the price of gold will be at a steady level as well.

Trading Gold Online

If you find yourself asking, “how do I trade gold?” the simplest answer is by going online. Much like other trading markets, the shift towards digital exchanges has been one of the most revolutionary implementations in the history of trading. Gold online trading has changed the market in several ways, as you can now purchase gold through the internet, which is a brand new market. This includes both bullion and coins and also extends to forex and ETFs.

In addition, you can invest in companies that specialise in the extraction, development and production of this precious metal. Online trading gold is becoming more accessible as more companies enter the space to bridge the gap between retail and institutional investors.

You can also utilise the risk management tools, such as trading software, to set up stop loss and take profit limits.

It is imperative that you perform the necessary market research before investing in any industry. All investments come with risk, and there is no way to guarantee you will make money. You must ensure that you only invest money you can afford to lose, and effective due diligence is key.

Our insights page about trading on emotion can give you more detail about how negative emotions can impact your trade, if you allow yourself to trade on emotion, you could end up in a position where you have gone against your initial strategy.


Gold trading online is a market that will likely continue to blossom. Digital trading is still a new investment area, but it creates accessibility for people who previously couldn’t access the market. Trading in gold is a market that operates differently from stocks or cryptocurrency, for instance, as it usually attracts more investment during times of negative market sentiment.

Plenty of exchanges offer you the chance to trade in gold online. Thanks to the internet, learning how to trade in gold and online trading gold has never been easier.

Trading Gold On Forex

You can find gold on the forex market trading as XAU. One of the positives of trading gold on forex is giving yourself flexibility. To trade gold in this manner gives you the option to trade it on an exchange with plenty of liquidity. The two ways you can trade gold on forex are gold-linked pairs and dollar-denominated currency pairs.

Trading gold on forex is a chart that is open 24 hours a day. However, you will likely find the most price action during office hours in New York. This is when the big institutional investors tend to be most active. 

For some people, this is the easiest way to trade gold. It is broken down into a simple currency link. You can buy and sell it like any other foreign currency. The forex trading market sees trillions of dollars worth of trading every day. Therefore, you shouldn’t have any issues when looking to buy or sell your position.

The gold trade that’s available via forex is different to physical ownership. However, it is advantageous for investors looking to profit from their investments without paying for overheads like storage and insurance. Find out more information on how to trade forex as a beginner or determine the best indicators to look out for.


Thanks to revolutionary implementations that have been taken in online trading, there are multiple routes you can take into this market. The crucial thing is to do plenty of research. This will allow you to understand the market you are entering and the variables that drive the price, giving yourself the best possibility of success when you’re looking to trade gold.

Once you have grasped the basics and begun understanding how this precious metal market operates, you can manoeuvre yourself into a position where you can effectively trade this asset.

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