Gold
Online Gold and Silver trading offers a great alternative to currencies and indices for traders looking for both long and short term investment opportunities. In the Forex market, gold and silver are considered as a currency whose prices are always expressed in terms of the US dollar.
Online trading in gold and silver is similar to trading in Forex. Their price is determined by the supply and demand as any other commodity and price is measured by their weight, usually per ounce (oz). The price of gold or silver quoted in ounces shows how much it costs to purchase one ounce of gold or silver in US dollars. Spot gold is traded under the symbol XAU and spot silver is traded under the symbol XAG.
For example, if XAU is quoted as1068.12, it means that an ounce of gold is traded for 1068.12USD.
Factors that determine the price of :Gold and Silver
- Purchase and sale of government gold and silver reserves
- Industrial demand for use in electronics, mirrors, etc
- Demands from the jewelery market.
- Demand from the speculator market.
Gold and Silver are also traded in the Futures market where a buyer agrees to receive the delivery of the metal on a predetermined date in the future. However, only about 1% of futures contracts traded result in delivery. Traders generally liquidate their positions before the maturity date of their contracts.
Trading unit:
Gold Futures: Trading takes place in lots of 1,000 troy ounces (1 normal lot).
Silver Futures: Trading takes place in lots of 5,000 troy ounces (1 normal lot).
The Gold and Silver Forex market is an over-the-counter market (OTC market), meaning that there is no central market; and transactions are conducted via telephone or the internet by a global, decentralized network of banks, corporations, importers and exporters, brokers, traders and other enterprises systems interconnected by computer and communication networks, including the Internet. This is in contrast to, for example, the Dubai Gold and Commodities Exchange (DGCX), which is a centralized commodities trading location. Although New York and London are the biggest marketplaces for gold and silver, buying and selling happens 24 hours a day 5 days a week as there is no central marketplace. The prices of Gold and Silver are an important driver of the forex market and affect the currencies.
Advantages of Gold and Silver Trading:
- 24 hour market: the Gold and Silver market like the Forex market operates 24 hours a day, 5 days a week that means that you can trade during breaking news and major events without waiting for the market to open.
- Access to the largest financial market in the world, with over $3 trillion traded daily, providing you with unmatched liquidity.
- High leverage/ low margin requirements – offering traders leverages of 100 to 1. This means that for every $1000, a trader controls $100,000 worth of contracts.
- Potential for success in both falling as well as rising markets
- Access to global markets
Other advantages include:
- Low transaction costs – Commissions as low as $30 per round-trip trade
- Ability to make profits in any market – whether rising or falling
- Powerful charts and tools to help with your technical analysis
- Free practice account to help hone your trading skills and perfect your strategies
- Trade online from anywhere in the world
Try Gold and Silver trading today
At Al Shuaib International we believe that an educated investor is a confident investor. Given the risks involved in online trading, we are committed to providing you with all the information you need to be confident that online Gold and Silver Trading is right for you. Open a free practice account with Al Shuaib TRADER Demo both to educate yourself in simulated trading conditions. Al Shuaib TRADER Demo is easy to access and will allow you to practice trading, without risking any money. You get a simulated trading account with $25,000 cash balance which allows you to:
- Practice buying and selling of Gold and Silver – both spot and futures
- Practice trading in a variety of additional instruments such as spot cfd’s, commodities futures, indices, currencies, etc.
- Trading in global market from your home
- Practice building your own online portfolio with a variety of instruments
Risk Warning
Trading in the Foreign Exchange (Forex) market might carry potential rewards, but also potential risks. You must be aware of the risks and be willing to accept them in order to trade in the foreign exchange market. Do not trade with money you can't afford to lose.