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Trading gold

Gold trading

At this moment gold is one of the most popular commodities to trade or to invest in. Increasing numbers of investors fall prey to gold fever, trade gold and make huge profits. This is not surprising if you look at the trend of the goldprice over the last 10 years. It is evident that gold is in a multiyear bullmarket. The last bottom in 2001 was at $250,- per ounce of gold. Compare this price with the current goldprice and you will see that gold has been a good investment for the last couple of years. Also trading gold online has taken a huge flight.

The prospects for gold are still very good. Worldwide there is an enormous money creation going on through low interest rates and huge support actions from different governments and central banks. Moneyprinting ignites the fear of inflation. That in combination with the current turmoil on the financial markets makes people flee in gold.

Many analysts expect the top in the current gold bullmarket, somewhere between 2017 and 2020. The last gold bullmarket, that ended in 1980, has shown that there is a very big chance of a blow off top. This is an enourmous parabolic spike up, followed by a big destructive crash. It offers opportunities but also dangers for investors and traders in gold.

Gold CFD's:

By trading gold cfd's these chances can be taken advantage of in a spectacular way. The cfd offers the possibility to trade with leverage. With a leverage of 20 and a 5% up move in the goldprice, the cfd trader with a long position will make a profit of 20 X 5% = 100%.

Most cfd-brokers offer the possibility to trade gold. There can be a difference however in the leverage they offer. For instance Plus500 offers leverage on gold of maximum 12:1, eToro max. 25:1 and Markets.com 100:1.

Cfd's also offer the trader the possibility to limit risk. This can be done by placing a stoploss order. The stoploss order is an ongoing order that closes the position when a given pricelevel is reached. Say you go long 1 ounce of gold at a price of $1700 per ounce and a loss of max. $30 is acceptable to you. Then you give a stop-loss order for $1670. As soon as the goldprice  hits $1670, your position will be automatically closed. You can take profits the same way.

Many brokers offer much more, advanced, order possibilities. Check out their websites to find out more. The following brokers offer gold trading with cfd's:

 

Plus500