Gold Trading Online
Gold provides investors with an opportunity to diversify portfolios and historically many investors have bought gold coins or small bars; this brings its own challenges including insurance and storage; there is also sometimes a premium to be paid for the coins which could be over 5% more than some of the other approaches listed below. Gold trading online is now a popular way of speculating on the fluctuating price of the precious metal, this is in part due to the convenience factor and the availability of advanced charting/trading platforms.
Gold ETF Trading
Some market speculators prefer to trade gold via the stock market with a gold ETF (Exchange Traded Fund). These Gold ETF’s are sometimes called “paper gold”. Investors in gold ETFs purchase units from the mutual fund and these can represent a pre-defined amount of gold. Delivery of this gold does not take place as the fund is for speculative purposes only. These gold ETFs can be traded online via the stock exchange. ETFs track the current gold spot price and some aren’t always backed by physical gold. An example ETF is the SPDR exchange traded fund which is traded on NYSE. See chart below.
SPDR Gold Shares (GLD)
(Source Yahoo Finance)
Gold Trading Through A Forex Broker Account
A popular way of trading gold online is by trading gold through a forex broker account. In a similar way to trading FX the symbol for gold is three letters; so instead of EUR/USD for trading the euro versus the dollar you can trade XAU/USD which is gold versus the dollar. The price is represented as follows (price is for illustration purposes only) US$1,500 XAU/USD is equal to US$1,500 (less commission and the spread) for a troy ounce of the precious metal. As with the ETF you will not see delivery of the physical gold bullion; this is purely for speculative purposes. AVAFX (click here for the website) are one of the brokers who have gold, oil and other commodities available to trade on their platform.
Buy Physical Gold Online
One other way to buy and sell gold is by using a service like Bullion Vault who say that they provides a low cost approach for the buying, selling and storage of gold. BullionVault currently advise that they take care of around $2.1 billion worth of gold for in excess of 36,700 users (June 2012). Bullion Vault advise that the buying and selling price is typically well within 0.2% of the gold spot rate. Click here for the Bullion Vault website.
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