Gold has historically been seen as a stable store of value and safe haven asset during uncertain times. It has been used widely in trade for thousands of years. Gold remains popular amongst traders today partly due to its international recognition and use by central banks in managing currencies. Traders can gain exposure to gold price movements through futures contracts or CFDs without owning the physical asset, allowing them to profit from both rising and falling prices. Popular ways to trade gold include contracts for difference on spot prices, options CFDs, and gold exchange-traded funds.

1. What Makes Gold Popular Amongst
Commodity Traders?

2. Points To Be Discussed Today:
• What Makes Gold Popular
• Gold’s Popularity Amongst Traders
• Gold’s Relation To Global Currencies
• How Is Gold Traded On The Market?
• Popular Ways To Trade Gold
• Trading Gold CFDs
• Exposure Through Gold CFDs

3. What Makes Gold Popular
• Gold has historically been referred to as a
‘Safe Haven’ or ‘Store of Value’ asset which is
a safe place for investors to ‘store’ their cash
during times of instability or uncertainty.
• Adored for thousands of years, Gold, a
precious metal, has historically been used for
industry, beauty, and most importantly, trade.

4. Gold Being An Internationally
Recognized
• This is true through today where it powers
trade amongst individual traders, up to the
world’s central banks.
• With Gold being an internationally recognized
commodity throughout history, it is no
wonder that it has remained a popular
commodity amongst traders until today.

5. Gold’s Popularity Amongst Traders
• Gold’s popularity can be traced far back to
ancient Egypt and beyond. Rare coins and jewelry
have contained this precious metal, praised for its
beauty and proof of sophisticated trade systems.
• Up until the 1970’s the USD was on a system
called the Gold Standard.
• This meant that each ounce of gold was given a
USD value that was directly connected to the
dollar.

6. Gold’s Popularity Amongst Traders - I
• This meant that for every dollar that was in
circulation, the US mint had to have stored gold
in order to print it.
• If printing exceeded the amount of gold that was
available, it would lead to inflation.
• This system was abandoned in 1973 to make way
for a more modern system of banking and
trading.
• At this point, gold began having its independent
valuation dictated by supply and demand, not
governmental agencies.

7. Gold’s Relation To Global Currencies
• Gold is generally viewed as a store of value
that has retained its worth over time, despite
economic booms and busts.
• Larger economies like the US, UK, Euro zone,
and China still hold large gold reserves, even
though the commodity is not directly tied to
the currency's value.

8. Gold’s Relation To Global Currencies - I
• In order for these currencies to retain
their value, central banks use the
purchasing of gold as a tool to show they
have a physical asset to justify the
valuation of their money.
• For countries experiencing high inflation,
they may purchase gold to hold in their
reserves.

9. Gold’s Relation To Global Currencies - II
• This may instill confidence in investors and
traders, proving that they have the ability to
stabilize their currency.
• While this is just one of many tools that
central banks use to maintain a stable
currency, traders recognize this yellow metal
as providing greater legitimacy to a country’s
currency valuation.

10. How Is Gold Traded On The Market?
• Gold is traded on the Chicago Mercantile
Exchange (CME), in USD and is measured in Troy
ounces.
• This middle-aged era measurement translates
one Troy ounce to 31.1034768 grams.
• The CME allows you to trade Gold bullion futures
contracts.
• Buying these directly from the CME may be
accompanied by a commitment to purchasing,
storing, and insuring the underlying asset, should
you own the contract as it expires.

11. How Is Gold Traded On The Market? - I
• Alternatively, traders can buy or sell Gold
contracts CFDs, exposing them to the volatility
of the commodity without requiring them to
purchase the underlying assets.
• CFD contracts can be opened against the
metal’s current spot price, allowing traders to
gain exposure to this metal’s volatility and risk
without buying the underlying asset.

12. Popular Ways To Trade Gold
• Gold has been a highly sought after
precious metal for thousands of years.
• Regarded as a safe haven metal,
regardless of location, economic
situations, or political instability, it has
historically maintained value well over
time.

13. Popular Ways To Trade Gold - I
• Today, Gold can be traded by buyers, sellers,
miners, and speculators who may open
positions against the price movements of the
precious metal without owning the underlying
asset.
• Each strategy comes with its own potential
risks and potential rewards so traders should
pick the trading strategy that best suits them.

14. Trading Gold CFDs
• There are multiple ways to trade Gold,
including traditional markets and CFDs.
Below are four popular ways of
speculating on the price of Gold on the
Plus500 platform.
• Gold CFDs Contracts for Difference
(CFDs) allow you to open a position
without needing to purchase the
underlying asset.

15. Trading Gold CFDs - I
• Rather, a trader can open a position to go
Long or Short on an instrument, speculating
on the price movement and recognizing
potential gains or losses depending on the
real-time movement of the instrument’s spot
price as traded Over the Counter (OTC).
• By trading based on their spot price, rather
than on a future price, traders can recognize
higher liquidity and availability.

16. Options CFDs
• The benefit of Options CFDs on Gold is that you can
pay less to open your position than if you chose to buy
a gold CFD itself.
• This is because you are opening a CFD position against
the Options contract, not Gold itself. This can offer a
trader exposure to the instrument at a lower price.
• It is important to remember that high volatility of
Option CFD can carry higher risks.
• Moreover, there are many other factors which can
cause major fluctuations in the value of Option CFD.

17. Gold ETFs
• An ETF closely follows the value of an
underlying asset.
• A CFD on a Gold ETF, such as GLD tracks
the daily price of Gold, allowing traders
to open Buy and Sell positions against
the underlying ETF.

18. Exposure Through Gold CFDs
• Trading CFDs on Gold allows traders to become exposed to
the volatility of this popular commodity without needing to
purchase and maintain the underlying asset.
• It is also possible to go short on a commodity, should a
trader speculate that the price will drop.
• For example, traders who open a Buy position speculate
that the price of Gold will rise.
• If they are right, they will make a profit on the price
difference between the opening price and the higher
closing price of their position.
• If however, the closing price is lower, they will incur a loss
that is equal to the difference between the opening and
closing rates.

19. Exposure Through Gold CFDs - I
• On the other hand, if a trader believes that the
price of Gold will fall, they can open a Sell
position, allowing them to profit off of the
opening price and lower closing price.
• On the same note, if the price rises from the
opening price and the trader closes their position
at the higher rate, the trader will incur a loss
which will be the difference between the opening
price and the higher closing price.

20. What Makes Gold Popular Amongst
Commodity Traders?

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What Makes Gold Popular Amongst
Commodity Traders?