Getting Started With Gold Trading

Exchanging gold with other commodities is an age old practice. Aside from being admired for its beauty and symbol of power, gold is also used by investors as a way to protect themselves against inflation. Unlike for currencies and other financial investments, the prices of gold remain unaffected by external economic conditions.  And with the high demand for this commodity as a stable financial instrument, more and more investors are considering gold as part of their portfolios.

If you are looking to diversify your portfolio into gold investments through a Dubai broker, then there are a number of things you should consider first. Just like any other investments, gold trading has its pros and cons so take note of these before making a decision.

Educating Yourself

The analysis tools used for gold trading are relatively different from that of currencies trading in Dubai. In currencies, traders tend to rely more on technical charts while on gold trading; traders rely on several factors such as the supply and demand. This is one of the most important factors in determining the price of gold and other commodities. Investors can also analyze the prices of gold through the use of “trend-determining” strategies such as consumption, moving averages, behavior of price patterns and rates of change. Most UAE Forex trading out there offer gold trading offer useful analysis tools so you don’t have to trade blindly.

Another factor you want to pay attention to is the nature of the market. Watch for wars and global uncertainties of different forms as these can considerably affect the prices of gold as well.

Choosing a Broker

Trading with gold can be done through Forex brokers but not all Dubai Forex brokers offer this. Moreover, with the wide range of choices available around the Internet, choosing which one to trade with can seem a bit overwhelming especially for a beginner. Finding out if a Forex broker offers gold is pretty much straightforward as this can usually be done by looking at the broker’s website. Finding out if a broker is legitimate is a different take altogether. It is highly advisable to choose a broker that is standardized by a regulatory board. These organization assures decent and ethical trading practices within the investment community. They have a set of rules and regulations which all brokers should adhere to. If the broker website does not include details about its regulation, then you may need to ask for it. Otherwise, move on to your next option.

There are other factors you go for online trading in Dubai. Find out whether you want to trade spot gold, futures or options. Spot gold trades are available globally in an over the counter market. Spot gold also allows traders to short sell if the markets are favorable to maximize their returns. A gold future on the other hand involves a certain amount of time before you can buy or sell a specific quantity of gold for a specific price.  Similarly, gold options give traders the right (but not the obligation) to buy or sell a quantity of gold at a certain period for a specific price.

All in all, Dubai gold trading is not only a great option if you want to diversify your portfolio but also as a means of protecting yourself against uncertainties in Dubai gold prices caused by inflation. If traded with a high level of trading experience and a good strategy in place, gold can prove to be a safer and more profitable investment over other commodities and even stocks.