Gold, which has a lengthy history in the trading world, is highly sought after by both investors and traders due to its status as one of the first market commodities. Additionally, the precious metal is known for its tendency to experience significant price fluctuations, making it well-suited for long and medium-term trading strategies that align with market trends. Moreover, gold serves as an attractive investment option for those seeking to increase their capital value by holding a tangible and valuable asset.
Short-term tactics such as day trading and scalping can also work in the gold market, but their effectiveness can vary depending on market conditions, as they perform better in highly changeable markets. Nonetheless, traders employing these more active strategies usually incur higher commission fees and dealing spreads compared to investors who prefer to purchase gold during price declines and hold onto it for several years or even decades.
Your choice of a gold broker may also rely on whether you prefer a broker to follow a long-term investment approach or a short-term trading approach. Additionally, individuals looking to make long-term investments in gold and intend to use it as a safe currency during difficult times might consider obtaining physical possession of the product with the assistance of a dealer.
The typical approach to investing in physical gold is to wait for a decline in the gold market in order to buy the metal. After purchasing the gold, you store it securely and retain ownership. If the market subsequently reaches a peak and you anticipate a subsequent decrease, you can sell a portion of your gold and wait for another decline to repurchase it.
History and Future Outlook of Gold
Gold has been widely used throughout history as a reliable way to preserve wealth and protect against inflation. Even if confidence in government-issued fiat currencies diminishes, people are likely to still view gold as having some value in economic transactions.
During troublesome geopolitical events such as war outbreaks, major elections, military coups, and natural disasters, metals like gold tend to experience significant appreciation. Additionally, fluctuations in U.S. interest rates, changes in central bank reserves, and events related to gold production can also impact gold prices on the worldwide market.
In instances of unforeseen and concerning events, the demand and value of certain commodities, particularly gold, can experience a significant rise as investors seek a secure option. Moreover, due to the long-standing perception of metals such as gold as a dependable choice during economic challenges and social instability, investors may purchase them as a widely accepted form of reliable currency in the event of an economic collapse.
When it comes to assessing the future prospects of gold, fundamental and technical analysis are the preferred approaches. Additionally, individuals keen on investing in gold can consider reviewing market sentiment indicators as a valuable indicator of where the market may be heading. The Commitment of Traders (COT) report, published by the Commodity Futures Trading Commission (CFTC), is a widely recognized sentiment report.
The COT report, released on Fridays at 3 p.m., analyzes the open interest in gold futures and options by different types of traders. When there are significant imbalances in open interest, it indicates a potential market reversal.
What to Look for in a Gold Dealer or Broker
When reviewing different online brokers, it is important to select one that offers the specific services and tradable products you need. Additionally, keep an eye out for the following criteria to ensure that a broker meets your expectations.
An online gold dealer must be subject to supervision by a prominent financial regulatory agency, such as the UK’s Financial Conduct Authority (FCA), the Australian Securities and Investments Commission (ASIC), or the Commodities Futures Trading Commission (CFTC) and the National Futures Association (NFA) in the United States.
Brokers operating in European countries must adhere to the EU’s Markets in Financial Instruments Directive (MiFID) and its more recent modification, MiFIR. These regulatory bodies are particularly beneficial when acquiring physical gold as they allow bypassing direct purchase from the U.S. Mint or Federal Reserve by utilizing a third-party intermediary.
In order to meet the necessary criteria of a reliable online broker, it is essential for them to offer a user-friendly software platform for trading purposes, which should also be available at no cost. However, if the platform engages in transactions involving physical gold or manages gold IRAs, it is imperative for you to ensure convenient access to your account and quick availability of customer support staff.
Although most online brokers have their own custom platforms, they also provide access to the MetaTrader 4 or 5 platforms from MetaQuotes, which are widely used in the market. These platforms offer traders various functionalities such as drawing and trading from price charts, conducting technical analysis, reviewing financial news, backtesting strategies, creating custom indicators, and automating trading.
Minimal Spreads, Commissions or Fees
For long term traders or investors, spreads and fees will not have a significant impact. However, those who employ active short term trading strategies may experience a substantial effect on their profitability due to high charges of this nature. Hence, it is advisable to inquire about any potential trading, fund transfer, or gold storage fees that may be applicable to your activities.
Full-service brokers, as opposed to discount gold dealers, typically have a research department that offers both fundamental and technical analysis to aid clients in their trading and investment endeavors. This enables clients to make informed decisions regarding their gold transactions and investments.
Competent Customer Service
If there is an error or an important question, traders and investors may find it necessary to promptly reach out to their broker. It is essential for any gold dealer to possess an efficient and accessible customer service department that offers live chat, phone support, email assistance, and a comprehensive FAQ section to address common inquiries. They should be capable of addressing various concerns such as the current market price of gold or providing recommendations on top picks of the day, as well as offering spot prices on distinctive precious metals they deal with.
If you are investing in physical gold products, it is crucial to consider that they need to be stored and can be challenging to comprehend, even if you can check your account quickly. Additionally, certain investors may prefer to separate their coin inventory from the trading platform where they hold other investments such as stocks and bonds. By having convenient access to both companies, it becomes simpler for you to monitor the whereabouts of your funds.
Best Gold Trading Brokers in 2023
One of the most affordable gold brokers is MultiBankFX, where gold traders receive average spreads of 0.2 points. This is made possible by the deep liquidity provided by numerous tier-1 providers, which allows traders to execute orders at visible spreads. As a result, trading fees are reduced and profits are increased. In certain jurisdictions, MultiBankFX offers a maximum leverage of 1:200, along with negative balance protection, all within a highly regulated and secure trading environment. When it comes to leveraged overnight gold trades, the swap rates are typically competitive, and short positions may even have positive swap rates. MultibankFX offers algorithmic gold trading on the MT4/MT5 trading platforms and also supports gold copy trading through its exclusive copy trading service.
There are 20,000 assets available that provide extensive coverage of financial markets.
You can trade with raw spreads starting from 0 pips, and the maximum leverage offered is 1:500.
Accounts that fall under the category of MAM/PAMM, as well as a copy trading platform that is owned by a specific entity.
ECN trading ensures deep liquidity and the absence of requotes when thinking step by step.
There is a broad range of asset classes available.
Spreads that are competitive.
To gain access to raw spreads, a minimum deposit of $5,000 is required for the ECN account.
FXTM gold traders have access to three assets: XAU/USD, XAU/EUR, and XAU/GBP. This makes it a great option for Forex traders who want to diversify their portfolios with gold. It is also ideal for traders who focus solely on gold and want to explore different currency trading opportunities. The commission-based ECN account at FXTM has a minimum spread of 5.0 pips, with an average of 33.0 pips. However, the ECN MT5 account offers lower spreads at 9.0 pips and 15.0 pips, respectively. Traders at FXTM can choose between the MT4 and MT5 platforms, both of which come with six add-ons.
The pricing environment and transparency for Forex are excellent, based on a commission model.
The trading platforms of MT4/MT5 have been improved, and a mobile trading app that belongs to us has been developed.
For beginner traders, there is quality market research available along with educational content.
A copy trading platform that is exclusive to the company, requiring a low amount for initial deposit and offering a substantial amount of leverage.
Cryptocurrencies are not included, and the options for commodities are limited.
The selection of trading platforms and additional trading tools.
The cost structure is highly competitive and the selection of assets is excellent.
With a leverage of up to 1:500, a low minimum deposit requirement is sufficient.
Reliable and properly governed
The geographical availability of Iress is limited.
At Trade Nation, gold traders have the choice between two options: MT4 and TN Trader Platform. The trading conditions for these two platforms vary. For MT4, traders can choose the XAU/USD CFD with a maximum leverage of 1:500. This option offers a commission-free spread of 1.2 pips. Alternatively, traders can opt for a commission-based alternative with a spread of 0.4 pips in exchange for a commission of $7.00 or a total of 1.1 pips.
The TN Trader Platform provides a rolling spot gold contract with a maximum leverage of 1:200, a guaranteed stop distance starting at 1.5%, and a guaranteed stop charge triggered at five times the margin requirement. Additionally, there is a gold-silver rolling spot difference contract offered.
A trading environment specially designed for beginners, which has been made simpler.
All traders can use a single account type, which supports a total of eight different base currencies.
The proprietary trading platform includes embedded quality trading tools.
International traders should carefully select a balanced range of assets.
Payment processors are only available in limited quantities.
AvaTrade provides gold traders with various options such as CFDs, options, and ETFs, enabling them to implement intricate gold trading strategies using a multiple-step approach. Additionally, it offers a comprehensive introduction to gold trading, positioning itself as one of the top gold brokers. The separate Ava Academy offers a top-notch educational platform for all trading-related topics, and the platform choices available at AvaTrade offer tailored solutions for every trading strategy, making it one of the most reputable regulated brokers.
AvaTrade enhances the WebTrader and AvaTradeGO platforms through the Trading Central services upgrade, while Ava Options is made available to option traders. AvaTrade also enhances the MT4/MT5 platforms by incorporating the Guardian Angel plugin, and introduces the fee-based Ava Protect insurance policy, which safeguards against losses incurred in trades.
SharpTrader provides a high-quality educational offering.
There is an excellent range of trading platforms available that cater to a diverse range of trading needs.
Opportunities for cross-asset diversification and broad asset selection.
A broker with oversight from a central bank that is well-regulated and trusted.
The trading costs are competitive, but they are not particularly extraordinary.