Skip to main content

Gold Trading in Singapore

gold trading
If you are a beginner in gold trading, you have come to the right source of information. You need to choose a gold market to start trading gold. You can choose to venture into the gold CFD markets or trade gold stocks and ETFs. The steps below can guide you on how to start gold trading Singapore.

Best Gold Trading Platforms in Singapore

What is gold trading or investing?

There is a clear difference between trading and investing in gold. The two of them involve taking a position on gold’s future price movement, but they still differ in many ways. Gold investment involves taking ownership of the physical gold and making a profit from it when the market value increases.

Gold trading, on the other hand, involves taking a position on gold after predicting that its price will rise or fall from the current price. The difference in price value between the time of taking that position and the time of exit determines the profit or loss recorded by the gold trader.

You can make a profit when you invest in gold only if the market value of gold rises. On the flip side, you can make a profit from gold trading if the price rises or falls. You will not have to take ownership of the physical gold before you can trade gold. You only need to trade the price differences.

You can invest or trade different categories of gold assets, some of which are highlighted below:

  • Spot gold: This is also called spot gold price. It indicates the cost of buying gold upfront or on the spot and refers to the cost of one troy ounce of gold. You do not have to buy the physical gold or take ownership of the precious metal before venturing into spot gold trading.
  • Gold futures: Gold futures contracts make it possible for the gold trader to buy and sell gold simultaneously. The trader exchanges gold for a given price at a particular date in the future. The traders are free to uphold their ends of the deal through cash or physical settlements. The price is the only element under the control of market forces.
  • Gold options: Options contracts are somewhat similar to futures. In this case, however, the trader is not under any trade execution obligation when buying. Via options, the traders can exchange gold futures or physical gold at a given price on a given date. A call option is a signal to buy gold while a put option is a signal to sell gold.
  • Gold ETFs: ETF stands for Exchange Traded Funds. It tracks the share basket movement of publicly-traded gold production, refining, and mining companies. The trader can enjoy a very wide exposure when trading ETF compared to what the trader can get from a single position, making them a very popular way to diversify the trader’s portfolio.
  • Gold stocks: You can also prosecute gold trading Singapore by trading gold stocks. It will give you exposure to all the elements of gold, helping you to diversify your portfolio. There is a difference between the movement of gold stock and gold bullion. You need knowledge about the difference before venturing into gold trading.

How to Start Trading Gold in Singapore

Getting started in gold or silver trading is easy in Singapore. However, becoming a consistently profitable trader takes skill and knowledge. We have created this article to guide you on your gold trading journey. When you are ready to start trading gold online, check out the tips below.

gold trading Singapore

Make a plan before you start

You can trade gold in the short term or long term. You need to choose the one you prefer between the two before venturing into gold trading. Your level of knowledge and experience in gold trading can help determine the right trading plan to choose. More experienced traders go for long-term trading, while the least experienced ones usually prefer short-term trading. Nevertheless, the two trading methods come with their respective risks. You must learn how to manage the risks before you venture into gold trading.

Open a gold trading account

You can start trading gold from a trading platform. The trading platform is called the broker. You need to first open an account with the trading platform to enable you to play the games with ease. Many of the gold trading platforms today do not require too many details before allowing you to open accounts with them. Bear in mind, however, that the qualities of trading platforms differ. You should first investigate the sites before you register there to start gold trading in Singapore.

What moves the gold market?

Before you start trading gold, you need to fully understand the elements that move the gold market. Supply and demand are among the factors responsible for the gold movement. Some of the factors are highlighted below:

  • Global demand for gold
  • Mining production
  • Interest rates
  • The health of the US dollars
  • Financial stress
  • Political insecurity

The value of gold has been on a steady rise since the 1970s. This is a consequence of the quadruple increase in the demand for gold since then to date. The value of gold may be on the rise, but it dips now and then due to the conditions highlighted above and this creates opportunities for CFD gold traders to make a profit from buying or selling gold.

What causes the increase in demand for gold? It is a popular raw material in the technology and jewelry industries. Investors also demand it and central banks store it up as a value store. Among them all, jewelry represents the highest demand of 50% and exchange-traded funds represent 29% of the demand increase.

Gold is a safe haven

Many investors consider gold as a safe haven and this also creates opportunities for gold trading Singapore. Many investors convert their cash to gold during the items of economic and political uncertainties.

The COVID-19 pandemic boosted the value of gold by 13% between January and May 2020. The value of gold does not fall rapidly as is the case with fiat currencies. When the economic, political, and social instabilities are over, the value of the gold investment would have increased tremendously since those uncertainties would have boosted the value.

Who are those who can trade gold?

You can trade gold if you fall into any of the categories below:

  • If you want to hedge your investment portfolio
  • If you want to speculate on the change in gold’s price; that is, if you want to speculate on its price rising or falling
  • If you are looking for how to leverage your exposure
  • If you want to trade short-term on gold

Note that gold traders do not have to own the underlying asset before they can make money from the precious metal. They can also make money both when the price of gold rises or falls.

How to create a CFD account for gold trading

gold trading accountBefore you can start gold trading in Singapore, you need to first create a CFD account with a broker. Gold is one of the assets you can find on many of the Forex brokers. So, you need to register on the broker’s platform to access CFD gold trading. Usually, the information demanded by the Forex brokers before you can start trading gold on their platforms is few. What obtains differs from one trading platform to another. You want to find out what the broker demands before you register an account there.

In most cases, you will need to provide your name and email address. You will also need to create a username and password before you can complete the account creation process. After you have created an account, the brokers will usually send a verification message to the email address you provided during the registration process. You will need to click on the link in the verification email to enable you to verify your trading account with that broker.

How to trade gold

Gold trading is not an especially difficult thing, but you need a lot of knowledge about how the gold market behaves before you can trade successfully. It can take a long time before you can learn how to trade gold. The market is highly dynamic too and you need to consistently update your knowledge base before you can trade gold successfully.

You will need to dedicate a lot of time to learn to know how to trade CFD gold. If you are the busy type that finds it difficult to spare adequate time to learn gold trading Singapore, you can still make money from gold trading and the points below can make that a possibility.

  • Expert Analysis: You can get expert analysis from professional traders that can give you helpful hints on the direction the gold market is heading. This way, you can trade gold without having to spend a lot of time on market analysis.
  • Technical Indicators: Technical indicators can help you to make a quick decision as regards the direction of the gold market. The technical indicators can show you the price trends and good examples are the Bollinger Bands and MACD. They are also very easy to follow, but you may have to combine several of them before making a final trading decision.
  • Trading Alerts: Trading alerts can completely simplify trading for you and tell you when to buy or sell. You do not have to know much about gold trading in Singapore before you can follow the trading alerts. Consequently, those that know next to nothing about gold trading can make use of the opportunity provided by the trading alerts.
  • Trading Signals: They also give the gold traders buy and sell signals, thereby removing the need to carry out your own analysis before you can trade gold. Trading signals are more specific than trading alerts.

Demo trading is essential

Before you venture into gold trading Singapore, you must first practice for as long as possible. The best way to practice is via a demo account. Forex brokers offering gold assets also offer demo accounts. Many of them will even give you access to the demo account for free without asking for an initial deposit.

Demo trading will give you access to all the knowledge you need about Forex trading. It is an avenue to learn how to trade. It will also show you how the trading platforms work. You can trust demo trading to help you develop a trading strategy and test the strategy. Experts say a beginner should demo trade for at least two months before venturing into live trading. You can only count yourself qualified for live trading if you make a regular profit from demo trading.

Frequently Asked Questions

Can I make money from gold trading?

Yes, you can make money from gold trading. However, you must follow a profitable trading strategy to make this possible. You need a prolonged period of learning before you can be confident enough to make money from gold trading Singapore. The learning period, however, differs from one person to another.

Do I need to learn about trading before I can make money from gold trading?

No. You can start making money from gold trading even if you do not have much knowledge about trading. You can make money from gold trading via gold trading signals that will tell you when to buy or sell gold.

Do Forex brokers also offer gold as an asset?

Yes, virtually all the popular Forex brokers out there today allow their customers to also trade gold. You can trade gold on virtually all the Forex trading platforms. So there is no restriction on gold trading.

Is there any 100% reliable gold trading strategy?

There is nothing like that. You should, therefore, not believe anyone that tells you otherwise. Just like other assets in the Forex market, gold as a CFD asset is also bedeviled by uncertainties, thereby preventing 100% perfection of any gold trading strategy.

How can I choose a good Forex broker for gold trading?

First, read reviews about the broker and check if it offers gold as an asset for CFD trading Singapore. Is the broker also regulated?  The reviews can show you if you should trust that Forex broker or look elsewhere. Read the reviews only from reliable sources of information too.

How can I minimize losses in gold trading?

You need to put together a working money management strategy to minimize your loss. For example, only register on Forex brokers that only ask for a small amount of money as a minimum deposit. You should only trade gold with money you can afford to lose.