How to Trade Gold

September 7, 2012 GuestPoster Gold Investing

Those who are currently wondering how to trade gold will need to learn quite a bit at first. If you are new to trading gold, there are a lot of things to consider. Trading gold is very different from buying gold, though there are some similarities. As far as trading gold futures are concerned, you will need to have a full understanding and knowledge of how it all works. When you are dealing with gold futures, you essentially enter into an agreement that you will pay the current price eventually, no matter what the price is like later on. The simple of it is that if the price of gold rises you will make money and if it goes down you will end up losing money.

There is a couple of different mainstream gold ETFs which you will want to look into, including the SPRDR Gold Trust which is backed by actual physical gold so you can feel fairly confident in your investments. You will find that this is far and away the largest gold ETF around and the shares for this fund are issued by the Trust. Another gold ETF which you will want to look into is the iShares Gold Trust which is also backed by physical gold. It is considered to be the second largest gold ETF in the world and it is certainly worth looking into if you are thinking about trading gold.

It is very important to make sure that you go with only the best most reliable ETFs though, because you will want to minimize your chances of loss as much as possible. Although it is true that there are around several dozen gold ETFs right now, the two that are listed above are by far considered to be the best for those who are looking to trade gold.

Some of the gold ETFs you will find are backed by physical gold while others are backed by futures or portfolios. ETFs that are backed by physical gold tend to be the most stable and reliable. You will find that a few of the gold ETFs that exist follow the price movements of the gold itself while others tend to be leveraged to the produce price changes and are up to three times larger than the actual metal. Ultimately you will need to have at least a basic idea of what you are doing and what your options are before starting to trade gold at all.

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