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?

Gold Trading
7 min read


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.

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