How to Trade Gold? – Learn Gold Trading

Gold Price Chart, Monthly Timeframe


Gold chart is presented below:

Another way to use the technical analysis is to look back at the price movements in the gold price chart. These previous prices can help the trader determine what he can expect in the future and the possible profit targets they should set for. Also, the resistance and support line can be easily drawn. A line drawn by connecting the previous higher lows shows a support line when the market is experiencing a downtrend. On the other hand, when the market is in an uptrend, the line drawn upon the previous highs works as the resistance for trading. Traders with more experience find using other technical tools, like Fibonacci Retracement, Elliot Wave analysis, and momentum indicators, more efficient to use.

Gold Trading and Its Strategies

From the beginning of the trade, gold has been of utmost value to anyone who wishes to own an asset or maybe trade. With time, the ways to own and trade gold have significantly changed. Earlier buying and selling of gold meant to have gold physically being purchased, stored, and then sold when the market price is favorable for the trader. It required much time and effort from the trader. But with time, the scenario changed. With stock derivatives being introduced in the market, people got the opportunity to trade in gold while they don’t even have to buy it physically. With the introduction of Gold Exchange-Traded Funds and other options, trading gold is no different than trading any other stock. 

Trading gold was made possible due to numerous strategies that were introduced. However, it’s a plus point that gold is an asset that increases or decreases the value of a bank account and can be kept physically. Nevertheless, many traders still prefer to trade it like a stock freely. And for that, the trader should be well aware of the primary factors that affect the supply and demand and, therefore, the market value of the gold, keep track of the gold price chart, and always be aware of the positions of other gold traders in the market. While these factors and analyses can help the trader understand the gold trend in the market, the gold price chart can help the trader know the entry and exit points in the trade.

How to learn gold trading?

To learn gold trading, you need to learn :

Gold Trading and Forex Trading

People mostly see gold as an essential asset that can be stored because gold will still hold its value no matter what happens economically. This is because its importance can never be brought down to zero no matter how bad a country’s economy suffers, what policies are introduced by its regulator, or the inflation rate that can even decline the currency to nothing. Therefore, gold has a global value and is recognized almost equally by every economy. 

Gold has proved itself to be a hedge against inflation. It is an asset that is considered as a haven asset amongst others like the Swiss franc, Japanese yen, and US treasury bonds. Traders use these assets in two situations. One, they purchase these assets when the risk trend is uncertain. Second, they tend to sell these assets when other stocks and securities offer higher interest rate opportunities. Therefore, Gold is a safe option for traders not to lose their funds.

However, specific points differentiate gold from forex. They are:

  • Unlike other currencies, gold can only be traded against the USD. This means that Gold and the USD are indirectly proportional. If one goes up, the other goes down. So, the traders should always keep track of the value of the US Dollar while trading gold. 
  • Although the forex market can experience comparatively low liquidity after the close of the New York market, gold experiences high liquidity almost 24 hours a day, the route of this 24 hours cycle starts with London and Zurich moving to New York, then to Sydney to Hong Kong, from there to Shanghai, and ends up with Tokyo, and finally, Europe retakes charge.
  • Apart from some big currency pairs like EUR/USD, GBP/USD, or USD/JPY, the liquidity of gold is more than any other currency pair. This means that the volume of gold traded in a day, on average, is higher as compared to other currency pairs (apart from the bigger ones)

Technical Analysis of Trading Gold

Technical analysis can help the traders study the previous moves in the price momentum of the gold and determine their future actions. The evident changes in the price chart of the gold have proved the significant change in its value as an asset amongst the traders. The charts show that the volume of gold was lower than after 2015, which falls between the range of $1000 to $1400. Therefore, it is also suggested the traders use the technical analysis tools that complement the market situation. For example, the range strategy or low volatility strategy is suitable when the gold chart shows the range-bound trend. On the other hand, momentum strategy can be used if the market is in trending mode. 


Trading Gold Tips  

  • Always keep track of the US Dollar along with the market value of the gold.
  • Gold is an asset that can be purchased both physically and can be traded like a stock. So, the traders must consider the mix of different analyses while trading in gold.
  • Traders can also keep track of the policies formulated by the central banks regarding the buying or selling of gold to keep track of its retail demand. Also, considering the demand for gold jewelry.
  •  Consider the supply of gold in the market equally important as demand. 
  • Apart from retail demand, industrial demand for gold also influences trading strategies.

Gold trading strategies for beginners and superior traders can differ as their knowledge and targets are also different. A beginner will not jump into the market with all his available funds. He would definitely try to start little by little and understand the market first, no matter how promising the gold trading may look. The trading strategy for beginners starts with basic market sentiment analysis. A new trader must be aware that the market sentiment and the price are indirectly proportional. If the market sentiment is negative, the prices are likely to rise, and if the market sentiment is positive, the prices are likely to fall.

On the other hand, traders with more experience will have more knowledge of the market and have many strategies. They know what the crucial points that need to b considered while trading in gold is. For instance, they know that the US dollar value plays a big role in evaluating the gold price in the market, so they always keep track of the currency’s movement. Also, with the evident popularity that gold jewelry enjoys, especially in countries like India and China, traders keep an eye on such opportunities and demands. Apart from the fact that it is considered a storable asset in these countries, central banks also provide the opportunity to buy and sell gold jewelry. Considering the supply of gold in the market is equally important, just like the demand. For that, traders keep track of the production of gold by its major producers like Newmont Mining and Barrick Gold. 

Apart from these tips and rules, the strategies and practices used while trading in forex is all applicable when trading in gold. Risk management, leverage, stop loss, and profit targets are some of these strategies. 




Igor has been a trader since 2007. Currently, Igor works for several prop trading companies. He is an expert in financial niche, long-term trading, and weekly technical levels. The primary field of Igor's research is the application of machine learning in algorithmic trading. Education: Computer Engineering and Ph.D. in machine learning. Igor regularly publishes trading-related videos on the Fxigor Youtube channel. To contact Igor write on:

Trade gold and silver. Visit the broker's page and start trading high liquidity spot metals - the most traded instruments in the world.

Trade Gold & Silver


Recent Posts