Something quite remarkable happened in April of this year, 2023.
We are not usually prone to excitable language at Gold IRA Blueprint, but there is a modern phrase that captures the sentiment of the event quite well, so we shall use it.
In short, gold caught fire.
The value of this ancient precious metal did something way beyond merely ‘edging upwards,’ however. The price enjoyed a serious upward move, bringing huge levels of attention from both institutional and retail investors in the process.
Everyone seemed to want a piece of the action, as demonstrated by Google search data (Google Trends) for “how to buy and sell gold” during this period.
Gold Surge
In fact, the general interest in gold went way beyond even the 2020 surge when gold exceeded the $2,050-per-ounce ceiling. It really has been a great year for the gold trade, and the immediate future looks very rosy for all those who are part of it.
Now, If that doesn’t excite you just a little, maybe some context is needed to nail this fact home: the last time we observed this kind of mass global interest in gold was quite some time ago – August 2011, to be exact – when gold broke the $1,900 barrier.
Essentially, we are witnessing a period of interest that hasn’t been seen in the gold trade for well over a decade.
Having said that, it really should come as little surprise to many of you because this is simply the nature of market prices influenced by global gold dealing. The price fluctuates here and there, but for the most part, gold is a reliable asset. Once in a while, it grabs everyone’s attention.
Growing Interest
When gold popularity suddenly explodes, you see a flood of new entrants to the gold trade looking to buy and sell gold or trade gold online, and that’s precisely what is happening in the buy-and-sell gold markets right now.
With that in mind, we feel this increased interest warrants another look into the ‘nuts and bolts’ of trading gold for anyone who is interested in entering the market.
Through this blog post, we intend to provide a basic four-step outline for gold dealing and trading gold online – the main things you need to be aware of to buy and sell gold successfully.
If you are a newcomer to the gold trade, don’t worry, as we intend to keep this succinct and easy to grasp. A no-nonsense approach to your journey into gold investment.
Let’s start by qualifying what drives the price of gold up and down. You need to know because the fundamentals and sentiments behind trading gold online will enter into your strategy as you become more efficient with gold trading over time.
1. Learn What Drives Gold Markets
Gold trading has an appeal that is as old as finance itself (older, actually), and while the key drivers are rarely overly complicated, the gold trading market isn’t exactly straightforward, either.
This ancient precious metal is swayed by a combination of forces relating to inflation/deflation, greed/fear, and supply/demand. Discerning these market forces is important for achieving success in gold trading – you need to have a full grasp of their inner workings beyond the headlines.
Let’s explain in easily digestible terms: during a global financial dip and a subsequent gold rally, for example, you might be tempted to trade gold, attributing its rise to market fear.
That would seem logical, after all. But if inflation is the real cause and not market fear, you would eventually be competing against technically savvy investors (like established Wall Street traders, for example) ready to counter by ‘shorting’ the market.
In other words, you need to understand what’s really driving prices beyond immediate first impressions only.
Another example would be geopolitical tensions, which are traditionally strong influencers on gold prices. Now, you might assume (again, logically) that a rise in international conflicts would naturally drive a rush to buy gold as a ‘safe haven.’ We are taught, as investors, that conflict drives the price of gold up. And it usually does.
But if strong economic numbers come out, the attention could shift. Instead of safe-haven buyers, you might see those ‘savvy’ investors we mentioned earlier looking to make quick money from gold trading online rather than holding it for security.
Diligence Is Key
All we are suggesting is this: indeed, there are established factors to consider, and following the narrative, sentiment, and fundamentals is important. Of course it is. But always dig a little deeper and use ‘broad picture thinking’ to determine all factors. Always go beyond the main fundamentals and look into additional, more dynamic factors.
Whether you’re looking to trade in gold online or planning more traditional gold trades (or trade any precious metal, for that matter), understanding market factors is going to be behind everything you do. So, learn to read the market and how to react to it.
There are other factors to consider, of course. The price of gold is affected by central bank policies, currency fluctuations, and even seasonal demand patterns in the jewelry market, such as the Christmas holidays, for example.
We could write in length about market factors alone – but the point of this blog post is to explore how to buy and trade gold in more general terms, so we shall focus on the main principles only for now.
2. Understand the Players
Investing in gold draws a really varied crowd of ‘players,’ each with separate agendas, experience levels, goals, and tactics.
At one end of the scale, you have the traditional, die-hard gold enthusiasts who invest quite heavily in physical gold, stocks, options, futures, and any other element of trading gold.
These investors are usually in it for the long term, rarely influenced by market fluctuations, and actually act as a good stabilizing force in the gold trading market.
However, with their commitment to trading gold comes unique opportunities for those with a different approach to trading gold, known as short-sellers. When market sentiment is clearly bullish, it’s easier for short-sellers to enter the gold trading market as they inflate prices, creating the perfect conditions for shorting.
By the same token, you also have institutional players (again, the savvy bunch we mentioned previously) who are trading gold through incredibly complex strategies. You probably know the type, as they are a stereotypical group often portrayed in movies and TV shows, surrounded by screens flashing with signals, trading graphs, and a desk littered with phones.
If this sounds a little intimidating (or time-consuming), remember there are alternative ways to invest in gold. That said, the basics of trading gold online are certainly not extremely difficult to grasp and worth the effort.
3. Learn the Charts
There is just no way of avoiding it: if you want to buy and sell gold online, you need to get to grips with the charts.
Start by looking into historical data. This will give you a ‘zoom out’ (or bigger picture) view of gold’s performance through various economic cycles, helping you to grasp the trends and occasional fluctuations.
Analyze the peaks and valleys of gold trades and prices to recognize support and resistance levels that could form your trading strategy.
The terminology gets a little complex here, but you will need to learn key technicals such as ‘Head and Shoulders,’ ‘Double Tops,’ and even the ‘Cup and Handle.’ These chart patterns are usually precursors to price movements, providing entry and exit points, and are something you will need to learn to some extent.
Pay attention to economic indicators like inflation rates, currency values, and geopolitical events. High inflation usually boosts gold prices, while a strong dollar often pressures them downward. Use these indicators to buy and sell gold alongside your chart analysis for a more thorough, well-rounded approach.
Terms like trend lines, relative strength index, and the more exotic-sounding stochastic oscillator should become second nature to you and will help develop your analytical depth.
4. Choose Your Gold Trading Platform
Your gold trading platform will be the main hub for all your gold trading activities, influencing your overall experience and profitability when you buy and sell gold.
Various types of gold dealing platforms offer different features and benefits, costs, and technical tools, so this shouldn’t be stumbled into blindly: you need to choose one that meets your trading strategy and goals.
Traditional Exchanges
Preferred by the larger gold dealers owing to their high liquidity, although they can be quite complex (and a little pricey) for anyone who wants to buy and sell gold for the first time.
App-Based Online Brokers
Platforms such as Robinhood are nice and user-friendly but do lack technical tools for more serious traders. This is entry-level trading, which is fine to start out but almost certainly needs abandoning once you have more competence in trading gold.
Forex Platforms
Known for high leverage, which can be something of a double-edged sword. High-leverage gold trading can greatly boost your earnings, but it equally elevates the likelihood of substantial losses.
Commodity Futures
This is gold trading for those who have a strong understanding of the market and are seeking opportunities to leverage their knowledge and experience. Various platforms offer the option to engage in futures trading for gold, which allows you to buy or sell the precious metal at a predetermined price at a specified time in the future.
Physical Gold
The traditional way to buy and sell gold relates to buying physical gold bars or actual coins. There is a certain element of satisfaction in holding a tangible asset, but you should remember additional overheads such as storage, security, and insurance.
Gold IRA
If you’re interested in the benefits of owning physical gold but would prefer a more simple, tax-efficient way to do so, you should consider a Gold IRA. This increasingly popular approach allows you to own physical gold within a retirement account, removing the anxiety of storage, security, and insurance fees.
Interested in learning more? With our comprehensive Free Gold IRA Guide, we will send you everything you need to know – completely free of any charges – through a simple but highly successful process that thousands of people have already benefited from.
Bottom Line
So there you have it – four key principles to help start your journey in the gold trade. Our advice would be to study the fundamentals and really get to grips with all aspects of those four points in order to buy and sell gold successfully.
FAQs
What Drives Gold Prices?
Various actors, like supply and demand, geopolitics, and inflation, affect gold prices.
How Can I Start Trading Gold?
Trade gold via Forex, futures, or buy physical gold. Each has unique pros and cons.
What is a Gold IRA and How Does it Work?
A Gold IRA lets you invest in physical gold with retirement and tax advantages.
Do I Need to Analyze Charts for Gold Trading?
Yes, understanding charts like trend lines helps in making solid gold trading decisions.
Article Sources
At Gold IRA Blueprint, we dive deep into the world of gold IRAs, using trusted sources to back up our insights. Our sources range from official documents to expert interviews, ensuring our content is both accurate and reliable. We also draw on research from reputable publishers to give you the most comprehensive understanding possible. Check out our editorial policy to see how we maintain our high standards for accuracy and fairness. Also make sure to check out our Financial Review Process to have a better understanding of our process.
https://en.wikipedia.org/wiki/Gold_as_an_investment
Authors & Disclosures
- Our content is independently written and reviewed by trusted reviewers & fact-checkers.
- We can earn money by connecting you with top Gold IRA Companies. Learn how our reviews work.
- Want to learn more? Meet our authors and explore our editorial policy.
