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Gold

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<p><em>The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients.</em><em><br/></em><em><br/></em><em>Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.</em></p>

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<h2>Why is gold trading so popular?&nbsp;</h2>

<table><tbody><tr><td><p>Gold, an inherently unique precious metal, has a long history of resilience that dates back to the 8th Century BCE. Its diverse uses range from being a store of value (inflation hedge), currency, safe-haven asset, dental material, jewellery, and electronic applications. Due to its finite supply, gold remains an implicitly rare commodity, making it popular among commodity traders. </p><p>With CFDs, you can speculate on the price of gold without taking physical ownership of the asset.</p><p>The gold market is very liquid and there are no shortage of buyers, allowing for ease of buying and selling at low costs. CFDs in gold can be a useful tool to profit from short-medium term price swings or to hedge export/import needs. For example, a jewellery designer who has a shipment of gold to pay for in a month and is worried about having to pay a higher price than what it's currently worth could hedge this risk by going long on the amount of CFD contracts which would cover their purchase.</p></td></tr></tbody></table>

Why trade or invest in gold?

<table><tbody><tr><td class="focus-visible"><p>There are a myriad of factors which cause the price of gold to fluctuate.</p><h3>Basic supply and demand</h3><p>For example, during COVID-19 we saw gold mining companies shutting down production - which led to lower supply, but demand was high given the uncertainty. This demand-supply mismatch led to a rise in the gold price. With increasing technology, maybe a new use case for gold could be discovered leading to a dramatic increase in demand for gold.</p><h3>Geopolitical uncertainty</h3><p>If there is geopolitical uncertainty or general risk aversion with equity markets declining substantially, then typically, investors/traders flock to gold as the safe-haven asset to protect them.</p><h3>Central bank policies</h3><p>Firstly, their buying and selling of gold to either add or deduct from their reserves will drive price changes. Secondly, their interest rate or asset purchase decisions influence yields. This will play an important role in gold’s price as it’s a yield less asset (doesn’t pay dividends or income) and other assets, such as bonds, may become more attractive at the expense of gold. We tend to see an inverse relationship between yields and gold.</p><h3>The dollar</h3><p>The dollar also plays an important role for gold price movements. Given its priced in dollars and when the dollar declines, other investors using currencies like the yen, euro, Aussie dollar can now buy more gold priced in dollars as their currencies have appreciated against the dollar.</p><h3>Inflation</h3><p>Last but not least, it wouldn’t be right speaking about the determinants of the price of gold without mentioning inflation. Inflation erodes the purchasing power of fiat currency and therefore makes gold more valuable. One can monitor instruments such as the US 10-year breakeven curve to get a read on inflation dynamics or US CPI data releases.</p></td></tr></tbody></table>

What moves the price of gold?

<table><tbody><tr><td><ul><li>Speculators/traders who seek to profit from short term price moves.</li><li>Hedgers – both for commercial (importers and exporters) and investing reasons. Investors may want to use CFDs to hedge their spot holdings.</li><li>Central banks adding or deducting to their gold reserves.</li><li>Corporates for industrial uses, such as dentistry and electronics.</li><li>Consumers who are purchasing it as a gift</li></ul></td></tr></tbody></table>
<p></p>

Who trades or buys gold?

<h2>Five reasons to trade Spot Gold CFDs with Pepperstone</h2>

Trading Tips for Spot Gold

<table><tbody><tr><td><strong>Currency</strong></td><td>USD</td></tr><tr><td><strong>Base margin</strong></td><td>0.5%</td></tr><tr><td><strong>Contract size per standard lot</strong></td><td>100 ounces</td></tr><tr><td><strong>Swap type</strong></td><td>In points</td></tr><tr><td><strong>3-day swap</strong></td><td>Wednesday</td></tr><tr><td><strong>Minimum average spread (points)</strong></td><td>0.13<strong>†</strong></td></tr><tr><td><strong>Trading hours (GMT+2)</strong></td><td>Instrument available from 00:01 - 23:59. Market opens at 01:00 on Mondays, closes at 23:55 on Fridays.</td></tr></tbody></table> <p><sub><strong>†</strong>Commodity CFD spreads are quoted in points with reference to the equivalent underlying market contract. Average spreads updated April, 2021.</sub></p>

Trading details

<h2>Commodities</h2>
<p><a href="/trading/instruments/commodities/">View all Commodity CFDs</a>&nbsp;</p>
<h2>Shares</h2>
<p><a href="/trading/instruments/share-cfds/">View all Share CFDs</a></p>

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<p>Gold is one of the world's most highly desirable precious metals, which is traded by many retail traders and institutions to form the foundations of their portfolios.&nbsp;</p><p>Its importance, scarcity and (cultural and financial) value has only increased over the years, due to its sought-after use in jewelry production and in technology as an electrical conductor.&nbsp;</p><p>Gold is considered to be a "safe haven" investment during times of political or fiscal uncertainty, as its finite supply allows for it to be a good hedging tool. Stable price movements are often observed and in times of volatility, its price will likely spike due to increased demand.</p>

Is gold a good investment?

<p>Spot gold is the current price that gold is trading at right now and not a price that's set for a future date.&nbsp;At Pepperstone, you can trade gold in many different currencies, such as the USD, EUR and GBP.&nbsp;<br></p>
<p></p>

What is spot gold?

<p>You can trade gold on leverage (CFDs) with Pepperstone. Trading gold CFDs allows you to speculate on the price movements of gold and you don't own the underlying asset itself.&nbsp;&nbsp;</p><p>You can trade Spot Gold CFDs as a commodity, such as XAUUSD or XAUEUR. Alternatively, you can trade&nbsp;<a href="https://pepperstone.com/en-au/trading/instruments/share-cfds/" target="_self">shares</a> on companies that mine gold, such as Newcrest Mining Ltd (NCM.AX) and&nbsp;Fortescue Metals Group Ltd (FMG.AX).</p><p>Learn how to trade gold CFDs with our <a href="https://pepperstone.com/en-au/education/learn-to-trade-gold/" target="_self">comprehensive&nbsp;trading guide.&nbsp;</a><br/></p>

How to trade gold?

<p>You can keep up to date with any gold-related <a href="https://pepperstone.com/en-au/market-analysis/gold/">market news and analysis here</a>. Our global research team write financial market commentary and previews daily, across all asset classes.&nbsp;</p>
<p>You can also refer to reputable business and&nbsp;financial&nbsp;news sites, such as&nbsp;<a href="https://www.bloomberg.com/" rel="nofollow">Bloomberg</a>,<a href="https://www.ft.com/" rel="nofollow"> Financial Times</a> and <a href="https://www.reuters.com/" rel="nofollow">Reuters.</a></p>

Where can I access the latest news on gold?

<p>You can trade spot&nbsp;gold CFDs (e.g. XAUSUD)&nbsp;on either MT4 or MT5&nbsp;from 00:01 - 23:59. The market opens at 01:00 on Mondays and closes at 23:55 on Fridays&nbsp;(GMT+2). Our full list of&nbsp;commodities to trade and their session times&nbsp;is available <a href="https://pepperstone.com/en-au/trading/instruments/commodities/">here.&nbsp;</a></p>

When can you trade gold?

<p>Supply and demand will influence the price of gold, and during periods of general risk-off sentiment, traders will invest in gold to protect their portfolios in an effort to reduce their potential losses on other assets. </p>
<p>Central Bank policies, interest rates, inflation, global financial instability and (political) event risk will also cause gold price movements to fluctuate. Furthermore, we see an inverse relationship with gold and the <a href="https://pepperstone.com/en-au/market-analysis/usd/">USD,</a> whereby if the USD falls we're likely to see a hike in the price of gold and vice versa.<br></p>

<h3 style="text-align: center;">Ready to trade?</h3>
<p style="text-align: center;">It's quick and easy to get started. Apply in minutes with our simple application process.</p>

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Spot Gold

Why is gold trading so popular?

Five reasons to trade Spot Gold CFDs with Pepperstone

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