Main menu


How to profit from gold trading

How to profit from gold trading


My answer is for those who have seen the incredible roller coaster of gold prices and want to take advantage of it all. So this is my response.

In my little experience, gold trading is very profitable. Trading gold is easier (not necessarily easier) than trading currencies.

A currency pair like EUR/USD will have all kinds of fundamentals that can affect it at any given time. On the other hand, gold is affected by one major fundamental; The state of the global economy and financial markets.

If there is turmoil, the focus of investment capital will shift from capital appreciation to capital preservation. Gold will attract demand because investors want to preserve the value of their assets while understanding any turmoil the financial markets are going through.

If the financial markets start to recover for whatever reason (stimulus, central bank action, etc.), then investment capital will shift back into risk mode and leave gold (an interest-bearing asset) to where returns can be made. The focus shifts back to raising capital.

Once you have this basic understanding of what affects gold prices, you are in a position to trade gold profitably. You probably now need to be able to interpret what is going on with the US dollar, put it all together and do your own trade.

As of the time of writing, rising real long-term bond yields have been the dominant market-affecting factor affecting the US dollar, allowing the greenback to rally significantly in the past four weeks. This factor, along with stock market rallies to all-time highs, is why capital is leaving gold for dollars, US indices, and other yielding assets. Gold (XAU/USD) is down almost $75.00 (i.e. 7,500 pips) from March 18th to March 30th. I don't know how many currency pairs can offer such a range of movement.

However, like other assets, you need to know how to trade. I'm not talking about just buying or selling. Profitable trading goes far beyond that.

Can gold trading be profitable? By nature yes. But profitability is also a function of many factors that I can't address here.


A detailed explanation of gold trading and profit from it

You have my word that you will get your answer, but please stick with me for the entire content until you get some good value. The word “GOLD” in and of itself is a catchy word for fame and now in modern times it has proven to be an entity that most people are progressively interested in. The reason is clear, profit margins, since the beginning of this decade, the financial condition of the majority of people has not been calm and satisfactory to themselves and even to society. And everyone has always wanted an extra source of income because we humans are social creatures and we have always wanted to show ourselves superior to different circles of people whether they know us or not, because our ego is something we are all deeply marked with. It is rooted with that ego and requires dominance to be satisfied which can only be achieved with wealth. Now we come to the main point which is how do we get this wealth on our side, majority of people believe and live in a very wrong perception that earning money is totally dependent on skills, hard work, patience and all other moral values which we have been taught with since our childhood. And there is nothing wrong with that, since we were all brought up on the same common grounds of ideas, and that was true even back then when we were young. But now times have changed a lot, you must have seen young people on social media who are only 24 or 25 years old, giving wealth lectures to the more experienced and qualified seniors. As we move on, we can understand that making or making money on a large scale has nothing to do with skills, extraordinary talent, or hard work. All it takes is a little education about financial tactics and money management. Simply put, what does this mean??. It simply means that anyone with less money but good financial education can turn their pennies into millions or even billions as many people have already done so now what is this financial education so simply manage your expenses (this you have to plan it yourself) and invest your money in a sound, directed and trained manner under the supervision of experts. We now turn to our main question which is “is gold trading very profitable”. Then my answer would be yes it is very profitable. It is also one of the best ways to improve your financial situation. But this is only possible if you actually invest in it, this is the most important part and when I say investment all conditions of legitimate investment must be met. Let's see some of the legal requirements from an investment perspective. The investment must be planned, directed and trained and must be monitored by some experts in the field and must have a purpose. Now let me tell you why it is so important to follow these and what are some of the common mistakes people make while investing the wrong way. So what happens is that people simply buy gold after looking at a lucky person's decision and then sell it in a rush making them addicted to unstable profits in the short term. But such barns do not work all the time. There is no doubt that gold has proven to be a very strong commodity that does very well in the long term, but not in the short term. So what you need to do is -

Learn about gold, how it is traded, why it is needed and all other things you should know before moving into gold trading, get all your concepts from theoretical knowledge.

Once you have a good understanding of the theoretical concepts, the next thing you need to do is get yourself someone who can guide you on how to make trades in real time, because believe it or not the practical part of gold trading is a whole different story and you will need support holding hands for it.

Now once you have both of these tools at your fingertips, what you need to do is enter into gold trades in real time and identify and eliminate flaws, until such time as you become an expert.


Public opinion on gold trading

أWhen you trade stocks or bonds, you are putting money into entities that generate a profit (or tax from a growing economy in the case of government bonds). So while many people say that trading is a zero-sum game, the total trading bonds or stocks is not really a zero-sum for a growing economy.

On the other hand, gold does not grow in size. It does not generate any wealth on its own. It's just a yellow metal that costs money to store. Trading in gold is really a zero-sum game (which is very negative if you factor in the cost of storing gold).

The only benefit of gold is that it is a great hedge because its value is physical. I can't disappear like bonds or stocks when the economy is up and companies are going bankrupt. So buy gold if times are really bad. But I wouldn't trade/spot in gold (unless you buy it when it's very cheap in time and are prepared to hold it for more than 10 years).