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Top 5 Gold Trading Brokers

Know the benefits of spot metal trading

By Matt WiliamsPublished 12 months ago 3 min read
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Top 5 Gold Trading Brokers
Photo by Kanchanara on Unsplash

Commodity trading instruments are the most convenient method to diversify your portfolio. Traders prefer investing in precious metals via the gold trading platform provided by their respective brokers [ commonly MT4 and MT5]. Those new in the Forex market can leverage the benefits of investing in Gold and other metals.

There are many methods of investments, but here the focus is on trading spot metals and the brokers, which offers swift accessibility to trade this commodity. In this article, you can expect clarity on the two most crucial topics – spot metals and their advantage, the best trading platforms of 2022.

Global Market has a specific category of metals to trade, such as Gold [XAU] and Silver [XAG]. When the price appears at a point in time a trader places a trade to buy or sell these instruments, we call it Spot Price, and thus the trading of metals becomes Spot Metal trading.

The value of spot metals is subject to daily fluctuations because the market determines them. Due to the fact that there is no need for extrapolation when purchasing spot metals, the prices of these commodities are typically lower than the prices of futures contracts.

Since they make no market predictions, they only get what they see. So, how a trader enters the Spot market? Simply understand, Contracts for Difference, or CFDs, are the main focus of spot metals trading, especially in the retail trading market. CFDs let traders bet on how the price of metals will change without having to own the metals themselves. CFDs let you bet on prices going up or down, so you can trade in a bull market or a bear market.

Here is an example to make it clearer

Trader A thinks that the price of gold against the US dollar is likely to go up, so he or she opens a long position (buys). Trader A opens a CFD trade when the price of an ounce of gold is $1,300, and the price of the XAU/USD CFD contract goes up to $1,330. Since the price has gone up, Trader A decides to close its position and make a profit.

Profit = $1330 – $1300 = $30

Benefits of Spot Metal Trading

Volatility

Although the price of precious metals may rise and fall with market forces, they will always be valued highly because of their scarcity and rarity.

Choose between “long” and “short”

The freedom to either buy or sell precious metals without any constraints whatsoever.

Liquidity

Metals typically offer greater flexibility and more liquidity than other asset classes.

The appeal of a safe haven

When there is instability or upheaval on the market, precious metals can act as marketplaces that provide a safe haven for investors.

Portfolio diversification

Traders’ portfolios can benefit from the much-needed diversification that precious metals can provide.

Leverage

Trade higher position values while just depositing a small percentage of the total notional value. This is known as using leverage.

Best Trading Platforms of 2022

As part of our 2022 Review, we evaluated sixteen different online brokers; We analyzed pricing (such as contract prices and margin rates) and the platforms themselves, including trading tools, research, usability, and available order types, in an effort to trade gold online and identifying the platform that offered the greatest overall experience.

  1. CapitalXtend – 4.5 Stars – Excellent for Spot metal trading
  2. TD Ameritrade – 5 Stars – Excellent for desktop futures trading platform
  3. TradeStation – 4 Stars – Excellent platforms and low commissions
  4. E*TRADE – 5 Stars – Excellent web-based futures trading platform
  5. Charles Schwab – 4.5 Stars – Excellent Balanced offering

Originally Published on Shortkro

Source: https://shortkro.com/top-5-gold-trading-brokers/

adviceinvestingfintecheconomy
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About the Creator

Matt Wiliams

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