Spot gold trading is simply buying or selling gold at the live price. There are no market makers or brokers in spot gold trading. The spot gold market is an online platform where buyers and sellers trade directly with each other. Spot gold traders can buy or sell fractional amounts of gold bars, ingots or coins. This makes spot gold trading affordable for small investors.
Open an account with a foreign company offering spot metals trading. This is the best option since most U.S. brokerage firms do not offer spot gold trading. Make sure the company you select can accept U.S. citizens as clients before submitting any paperwork. Avoid companies that trade gold using Forex currency pairs, gold funds or exchange traded funds.Step 2
Open an online account with the firm you select and request a demo account at the same time. Download the trading platform and become proficient with how it works. Read the tutorials on spot gold trading and contact a customer service representative with any questions.Step 3
Start demo trading by choosing the New York, London or Zurich spot gold markets to trade. Each city’s spot gold trading price is slightly different from the others. Pull up the chart showing the live spot gold trading price for your city and overlay your preferred chart indicators.Step 4
Look at the bid and ask prices. The bid price is what you would buy spot gold at, while the ask price is the amount you would accept to sell. The spot gold market is heavily traded and the bid and ask prices will change constantly.Step 5
Enter a trade on your demo account based on your perception of where you think the price of gold is heading. Buy if you believe the price of gold will rise or sell if you think the price will fall. Practice until your winning trades outnumber the losing ones.Step 6
Fund your account and begin trading. Monitor your trade and have predetermined prices where you will close out your trade with a profit or sell to limit a loss. Your trading firm will not send you a 1099, so keep accurate records of your trades for tax purposes.
Items you will need
- Online spot gold trading account
- Keep up with news events and announcements that could affect the price of gold.
- Gold is very volatile and prices can fly up or drop down within seconds. Spot trade gold only with money you can afford to lose.
- Foreign brokerage firms are not subject to U.S. trading regulations. Be sure the firm you select is in good standing with its country’s regulatory agencies.
- Jupiterimages/Photos.com/Getty Images