How to buy gold on the stock market?
Gold has always been a safe and popular investment asset with numerous individual traders. But how is it possible to buy gold on the stock markets nowadays?
This is the subject we shall examine in this detailed article with explanations and information on the advantages of the various existing methods.
The advantages of gold on the stock market and its growth prospects:
Let us first examine the advantages of gold as a stock market asset. As with most commodities, gold has the particularity of being highly volatile. It is therefore an ideal asset for short or medium term trading strategies, or for traders that do not possess a substantial investment capital.
Also, gold has been recognised for a long time as a safe refuge value. This means that it has a tendency to main a high price level, even if other markets fall. In fact, investment companies tend to invest massively in gold when their other positions become a little risky. This reputation is due to the fact that gold is an exhaustible resource and the demand has been rising over the last few years. It is therefore difficult to envisage a serious prolonged fall in the price.
The reasons for the rise in the price of gold
For two years now, the price of gold has reached very impressive heights, even up to double the price per ounce. But, where does this phenomenon come from?
The answer is to be found from various sources. Firstly, it is important to remember that the price of gold is closely linked to the American dollar. In fact, as gold purchases are made principally in dollars, so the lower the dollar, the cheaper gold becomes.
But among the causes of this rise, one also finds the rise in energy prices like oil, itself linked to the value of the dollar. However, since 2008, the Fed, the organization responsible for the American monetary policy, applies a low rate policy which makes the dollar less powerful against the other currencies; this contributes to increased inflation and therefore encourages gold purchases by the investors. As the gold market is subject to the rule of supply and demand, its price logically increases as the purchases multiply.
Therefore, investing in gold is currently one of the best ways to make trading profits online.
How to invest in gold?
To start investing in gold you have the choice of different ways. The manner that comes instantly to mind is of course the purchase of physical gold in the form of ingots or coins. Although this method is fairly widespread, it does present numerous problems, the main one being the storage of the gold. Indeed, keeping gold at home is risky and the hiring of a safety deposit box in a bank represents a fairly major cost.
The best way to invest in gold is therefore not in the form of actually possessing physical gold. Of course, that is possible via your banking facility, if they offer gold accounts or investments in gold. But even here, your bank will certainly charge you taxes and diverse fees.
To avoid unnecessary expenses, the ideal way is therefore to trade in gold yourself from your computer. In fact, most of the online brokers offer their clients the opportunity to invest only in the gold market if they wish. To do this, you simply have to subscribe to a CFD type trading platform and start trading.
On our website you will find precious advice on learning how to trade online together with trading strategies which will maximise your chances for success.
Buying gold on the Stock Markets using CFDs:
Let us now look at a far more profitable method of buying gold on the Stock Markets. This is by using CFDs, or ‘Contracts for the Difference’, which are available through Forex brokers online. On these brokers’ platforms, numerous assets including commodities such as gold are easily accessible and you may, using CFDs, take position on the rise, and on the fall, on the latter.
Also, CFDs offer the advantage of offering the use of a leverage effect which enables you to multiply the amount of your investment by 100 or 200.
Start speculating on the price of gold:
Would you like to join those who speculate on the price of gold? Wait no longer, register now with a professional broker who will make available all the tools and functions required for you to make profits rapidly.