Gold trading has taken off since the global financial crisis as investors seek to diversify their portfolios out of cash into tangible assets. Gold has traditionally been a preserver of wealth and is seen by some as a hedge against inflation and the devaluing of a currency i.e. a reduction in its purchasing power. As governments across the globe employ expansionary policies lead by the devaluing of exchange rates, gold’s popularity has increased other than just a rise in its price.
Spot Gold or Silver can be traded as either a CFD on 1:100 leverage or against the US Dollar or Euro as a currency pair on 1:400 leverage.
Gold Trading Example
Opening a Gold position
Opening the Position
The price of gold is 1660.00/1660.50 if you believe that the price of Gold will rise, you can decide to buy 2 Gold CFDs at 1660.50 (one contract = 10 troy oz). There is no commission to pay on any of our commodities.
Closing the Position
Assuming one week later, the price of gold has increased to 1680.00/1680.5. You decide to take your profit and sell 2 contracts at 1680.00. The gross profit on your trade is calculated as follows:
The gross profit on your trade is calculated as follows:
|Gross Profit on Trade||2 contracts x 10 oz x US $19.50 = US $390|