CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing all your money. Read our full Risk Warning.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Based on your current location/IP address, you will be provided services by Fortrade Cyprus. 76% of retail CFD client accounts lose money

Gold CFD Trading in 2023 (Detailed Breakdown for Beginners)

Beginners usually start with the basics, and gold is probably one of those most popular commodities that have a very long history of being traded. Find out the ins and outs of gold trading, and get a head start with a few tips from our experts.

Andrew Moran - Writer for Fortrade
By Andrew Moran
Joel Taylor - Editor for Fortrade
Edited by Joel Taylor

Updated June 18, 2024.

Three gold bars resting on a stack of money (bills).

The global financial markets have greatly evolved in just the last decade alone. From technological advancements to software innovation, the world of investing and trading now consists of an extensive list of currencies and financial instruments. One of these is gold contract for differences (CFDs).

Put simply, a gold CFD is merely a contract between two parties speculating on the future price of the precious metal. Read on to learn more.

Note: Fortrade offers the ability to trade the price changes of instruments with CFDs and NOT buy/sell ownership of the instrument itself

How to Trade Gold CFDs

Here are several steps you can take when trading gold CFDs.

1. Open a Trading Account

Like any other trading endeavor, the first critical step that you will need to take is to open a trading account. For gold CFD trading, there are plenty of options to choose from on the web. When you are creating a trading account, many of them require the same things, such as the following:

  • Name
  • Address
  • Email
  • Telephone number

Once this is done, you have access to a treasure trove of financial products, resources, and customer service features.

» Explore trading strategies with the comprehensive Fortrade community

2. Select the Underlying Gold Product You Wish to Trade

Sure, you can purchase a gold CFD that homes in on the precious metal, but there are also many other underlying gold-related assets you can take advantage of, whether it is a gold mining stock or a gold-focused exchange-traded fund (ETF). Perhaps the best strategy is to concentrate on the gold price movement and then, with some practice, you can diversify your strategies and embark upon unique methods for gold CFD trading.

3. Identify Trading Possibilities Using Your Strategy

Do you have a gold CFD trading strategy? If not, you will need to manufacture one. After you complete this imperative task, you can then proceed to identify trading possibilities utilizing your specific strategy. Of course, there are many different tactics to choose from, such as news trading, trend trading, price action trading, and day or swing trading. The more you trade, the better acquainted you will become with how gold moves.

» Not confident enough to develop your own strategy? Take a look at our day trading strategy videos and our free beginner courses

4. Open Your First Position

When you become accustomed to gold CFD trading after you performed some demo account trading, you could proceed to open your first position. Whatever it is, this is a monumental occasion that you should be proud of!

5. Monitor Your Trade

Like every other CFD trading protocol, you will need to monitor your trade and how it is performing on a session-by-session basis. One of the best measures you can employ is by using fundamental or technical analysis. The former is generally an evaluation of the gap between market price and intrinsic value by using specific techniques. The latter includes a trading regimen that assesses your investments and searches for trading possibilities by monitoring price trends and patterns on charts.

6. Close Your Position

Finally, once you have met your price target—and you should always stick to your price target!—it is time to close your position. By doing this, you will ensure that you completed your mission, earned some potential profit, and learned some valuable lessons.

» Start practicing today: Learn more about demo accounts with Fortrade

3 Tips for Novice Gold CFD Traders

1. Know When to Select Your Positions

The first step to make is knowing exactly when to select your positions. While it is challenging to time the market, you should have a certain price in mind. Plus, you also need to have a general trading time you wish to maintain for gold CFDs. If you are day trading CFD gold, you may pick morning hours for trading activity, since this offers the most price activity.

If you are a swing trader—identifying upward or downward trends—then sometime between Monday and Friday is best (the market is closed over the weekend!).

2. Practice With a Demo Account

As previously mentioned, it is also a wise idea to start out by practicing gold CFD trading with a demo account. This allows you to practice trading with fake money rather than using your real cash on something you have never done before. By using a demo account, you can learn the basics, come up with new strategies, and experiment with tips.

3. Pay Attention to the News

Lastly, no matter what market you are trading, it is critical to pay attention to the news. This is most important for metal commodities, which can be sensitive to a whole host of factors, such as the U.S. Dollar Index (DXY), U.S. Treasury yields, monetary policy, inflation reports, and the broader stock market. You do not need to watch CNBC or Bloomberg all day, but understanding what is going on in the world and why can keep you informed of the current market situation.

Do Your Research!

In the financial markets, you never want to go in blind—you want to have a fundamental understanding of how everything works. This is only done by conducting thorough research and completing your due diligence prior to entering into a gold CFD trading position. Indeed, there are many ways the precious metal can be traded with all types of investment instruments. Most importantly, you want to check your emotion at the door and apply patience to your trade. If you have done your research and employed the best strategy, do not panic if conditions do not immediately go your way.