It’s no secret for any seasoned trader: Gold has exploded in value during the last year, going from $1,600 in October 2023 to a glorious $2,500 in September 2024. It’s the first time that gold has reached this number, and many of us are thinking that we might get a piece of the action. Most of us have a few words that come to mind when trading gold – a recession-proof-, safe haven that everyone should have in their portfolio. But how difficult is it to trade Gold for a profit?
Because we’re passionate about technology and how it can improve our lives, let’s deep-dive into a passionate search for gold trading. What are the best brokers available to the public in Africa? Is it safe to store gold?
The King of Safe Asset
Gold has been around for centuries in a way that no other product on this earth could compete with. Yes, we now have paper money, different currencies, state bonds, and even crypto-currencies, but gold is a metal that comes from the Earth. It’s very much finite, which means that there’s only so much gold to be extracted on this planet.
This fact alone makes precious metal rare and, therefore, very expensive. Gold is commonly bought during hard times, which means that its use is correlated to dramatic world events. Economies collapse, wars occur, but this shiny piece of metal keeps on adding value over time.
The price of gold is also very volatile by nature.
Sure, it took decades for it to reach its ATH (All-Time High) of 2024. However, this has been a rollercoaster ride for many traders. If you enjoy fast-paced trading, such as scalping techniques, it’s good to know that gold prices move so fast that it just might become very profitable, provided that you play your cards right.
Finding the Best Brokers for Gold Trading
Whatever happens on this tumultuous planet, gold will still be traded. Right now, you can buy gold assets in the form of stocks, ETFs, bonds, and securities. Trading it with forex is also a very interesting experience since it has a strong correlation with the US dollar (more on that later).
Whatever way you choose to trade this metal, you’ll definitely need a good broker who will help you in the long run. There’s no shortage of reputable brokers in Africa, and most of them share some common features: they offer powerful trading tools such as Metatrader 4 or Metatrader 5, and they operate with a regulated licence.
Looking for the best broker is the first step to trading gold like a pro. After a while, you’ll manage to analyse the moves of gold value a bit better, and you’ll definitely have an idea of when it’s time to buy or sell using a good broker platform.
Understanding Gold’s Correlation With US Dollar
The price of gold is most commonly expressed in US dollars. This is no coincidence because the correlation between the US dollar and gold has been well documented. Simply put, the price of gold tends to go up when the US dollar goes down. It’s related to the fact that when inflation is up, people tend to buy less. It’s the best time to find some refuge in the value of gold, because, as we mentioned before, this metal will always be present on Earth.
There are exceptions to that rule, of course, but it’s been quite tangible over the last few decades, especially after the Great Recession of 2008. Remember, it’s always during hard times that people are more interested in gold. This applies to the 2020 sanitary crisis too.
Different Ways of Trading Gold
Remember that the price of gold moves fast. You have many options to trade it in ways that fit your personality the most. You could, for example, buy a share in gold stocks, such as a mining company or even a jewellery store. You might as well do some scalping, which means getting small and hopefully consistent profits in Forex trading while the price of gold is on the rise. The latter is a technique that needs to be carefully planned by a seasoned trader.
Is It a Good Idea to Own Physical Gold?
While most of us own at least one piece of gold jewellery, purchasing an actual gold bar is a different beast. First, you need to stay well away from scammers that sell fake gold anywhere. Please try to find a reputable shop that sells gold, and only ask for the help of a specialist who can distinguish a true gold bar from fakery.
Also, keep in mind that some companies can sell you some gold, but they will also charge you a pretty penny for transport or storage fees. Then, there’s always the risk of getting burgled in your home. The choice is yours, but keep all those things in mind while trading physical gold.
