Most of the Gold trading is done in a similar method to how Forex is traded.
Instead of physically buying Gold bars, most investors and traders are using contracts such as CFD’s.
With CFD’s you are not buying the physical asset, but instead you are purchasing a contract. This contract is a speculation on whether the price will go higher or lower on the underlying asset. For example; if you trade a CFD on Gold, you are not buying a Gold bar, but trading on whether the price of Gold will go higher or lower. You do not physically own any Gold.
Whilst Gold can be traded in other currencies, it is normally traded against the USD. This makes it a more standard price around the world. This is important to keep in mind because what the USD is doing will play a large role in how Gold is behaving and trading.
Because Gold is seen as a safe haven market because it is a physical product with a limited supply, traders and investors will always flock to it when others markets are becoming risky.
Keep in mind unlike a currency where more and more can just be printed, there is a set amount of Gold and it cannot be recreated.
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