Gold is one of the best assets to trade in the world. As a safe-haven asset, gold offers various merits for traders and investors.

For those who are looking to enjoy the benefits of trading gold, the most basic way is to buy physical gold and sell it when the price goes up.

But trading gold in such manner is costly, dangerous, and illiquid. To put things into perspective, you will only be able to purchase one ounce of gold with a large sum of money which is around USD 1,786.39 (price on 25 April 2021).

On top of that, you would need to fork out some fees in order to store it at a bank or insurance company. If you are storing it in a safe at your home, you can get rid of the storage fees. But that will leave you expose to theft.

It is also not easy to sell physical gold and realize your investment immediately. And by the time the transaction is executed, the prices may have changed. Thus, this results in lesser profit.

Thankfully, there are many alternative ways to trade gold, one of which is through contract for difference (CFD).

The best way to trade gold – CFD

CFD, or contract for difference is a popular derivative product that is widely traded in the financial market.

It is a financial arrangement between a trader and a CFD broker. Under the arrangement, both parties agree to exchange the differences between the entry and exit price of an underlying asset.

This means that the trader is not owning the underlying asset. He/she only buys or sells a number of units for the underlying asset based on the entry or exit price.

CFD also allows you to trade on margin. Through this method, you only need to put down a fraction of the capital you would normally need to trade.

Hence, CFD trading is an attractive alternative to other forms of trading, such as spot contracts, futures, and options.

Advantages and benefits of trading gold CFD:

Trade with little capital and amplify your profit

The best thing about CFD trading is that it allows you to trade with leverage. Through leverage trading, you only need to put down a fraction of the value of an underlying asset to trade.

Let’s say you opt for a leverage ratio of 1:400 to trade an ounce of gold at USD 1,887. You can trade with only as little as USD 471.15, which is equivalent to 0.25% of the value of gold.

CFD trading provides greater exposure with a smaller capital while making global markets more accessible. It also amplifies the profits from your trades, but it will also magnify your losses. So, manage your risk accordingly.

Competitive trading cost

When you trade gold on CFD, you can enjoy lower trading costs as compared with many other forms of trading.

And ultimately, the lower trading cost will translate into higher trading returns for traders.

This is thanks to the competitive rates in the online brokerage industry where many CFD brokers are offering zero-commission gold trading with tight spreads. This is because most of their operations are online and digital, which helps to bring the cost down.

Some brokers even partner with liquidity providers to provide access for their clients to institutional-grade markets. With this, traders can enjoy better liquidity that keeps the spreads low when trading.

Around-the-clock global market access

Another advantage of trading on CFD is the convenience of accessing the global market at anytime, anywhere.

You can trade a wide range of trading products in all major markets on the online platform of CFD brokers. These include gold, forex, shares, crude oil, futures, and many more.

More importantly, you will be able to trade around-the-clock and even make trades before the market opens. This allows you to take advantage of the fluctuations outside market hours and get one step ahead of other traders.

All these can be done with one trading platform provided by your CFD broker. You don’t need to access multiple platforms to trade in different markets.

Benefit from both market directions

Gold CFD provides you the ability to trade on both market directions by going long or short on a product.

This means that you not only can benefit from a bull market where gold prices are going up, but also make profitable trades in a bear market where the prices are falling.

For instance, if you think the price of gold will drop from USD 1,887, you can open a short position. With a contract size of 100 ounces, your trade value is USD 188,700. Now let’s say the gold price has dropped to USD 1,787 a few days later. You will make a profit of USD 10,000 when you close the short position.

Hence, CFD will give you better flexibility in your trades when compared to some conventional forms of trading.

How to find the best broker for gold CFD trading?

Now you would have a better understanding of how CFD works in gold trading and what benefits it offers.

But you may be wondering how to choose a reliable online CFD broker to kick start your gold trading.

There are several key factors you should consider when choosing an online CFD broker. These include regulations, trading platforms and software, commission and spreads, and trading tools and features.

All these are some important considerations when choosing the right online brokerage platform for you to trade gold on CFD.

Start trading gold CFD with Doo Prime

If you are looking for a CFD broker to trade gold, look no further than Doo Prime.

Doo Prime is a well-regulated broker that offers an unrivalled experience for gold trading in the industry.

We are a subsidiary of Doo Group, a full-fledged financial services group that has established a strong global presence.

The group has also obtained multiple international financial licenses to provide professional services that cater to traders around the world.

These licenses are granted by the UK Financial Conduct Authority (FCA), the US Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA), the Mauritius Financial Services Commission (FSC), and the Vanuatu Financial Services Commission (VFSC).

As we strictly adhere to the rules and regulations under the licenses we have acquired, traders can rest assured that their interests and funds will be safeguarded and protected as our highest priority.

Trade gold CFD with spreads from 0.1 pips and zero commission

Doo Prime provides various gold CFD products, including gold spot (XAUUSD), CME gold futures, and COMEX gold futures.

These are on top of the over 10,000+trading products that we have on our platform. You can choose from forex, precious metal, energy, spot index, securities, and futures to trade.

The spreads for all products on Doo Prime are incredibly low, which starts from 0.1 pips. The ultra-low spreads are made possible with the superior liquidity provided by our sister company Doo Clearing.

Doo Clearing is a liquidity provider licensed by the UK FCA and Doo Prime has connected to its liquidity pools.

Furthermore, you can enjoy zero-commission trading with our STP Classic Account. The trading account only requires an initial deposit of USD 100 and comes with leverage of up to 1:500.

Doo Prime – The best choice for beginners and experts

Whether you’re a beginner or expert, we have all the technology, features, and tools to ensure your success in trading.

Doo Prime’s order execution is one of the fastest in the market, which is of 50ms.

This is thanks to the Direct Market Access (DMA) to the institutional trading market and the No Dealing Desk (NDD) function.

Our MetaTrader 4 (MT4) and MetaTrader 5 (MT5) trading platforms are equipped with DMA and NDD. Our cutting-edge technologies ensure all orders on our platforms will be executed without rejection and within milliseconds.

24/7/365 global trading

Moreover, Doo Prime MT4 and MT5 platforms are offering automated trading systems such as Expert Advisor (EA).

This feature is extremely useful for both new and seasoned traders. They can take advantage of these automated trading systems to execute their strategy with continuous discipline.

They will also not be missing out on any trading opportunity in the market. These systems will help them to monitor and make the trade when the right opportunity arises.

You can also take your automated trading to another level with Doo Prime’s Virtual Private Server (VPS). This is a stand-alone virtual machine that is capable of executing your automated trading strategy in the cloud server.

With our VPS, you can finally enjoy the convenience of 24/7/365 global trading.

Interested to find out more? Contact us via LiveChat on our website today. Or click here to sign up for an account and start trading with Doo Prime.