4 Proven Strategies to Invest in Gold

There are many reasons why you might want to invest in gold: as a hedge against inflation, currency risks or simply to diversify your portfolio. We discuss 4 proven strategies to help you invest in gold, and consider their pros and cons.

In this article:

  1. Gold CFDs: Contracts for Difference
  2. Gold ETCs: Exchange Traded Commodities
  3. Shares in gold mining companies
  4. Gold bullions: gold bars or coins

Invest in gold without commission with each of these brokers:

AvaTrade (AvaTrade.com) is an award-winning online broker. Trade CFDs on Forex, crypto-currencies, shares, metals and more on MetaTrader 4 or 5. AvaTrade accepts all Expert Advisors except those with a focus on arbitrage.

  • Risk warning: 79% 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.
  • Markets: Forex (CFD), Cryptos (CFD), Stocks (CFD), Indices (CFD), Metals (CFD), Energy (CFD), Commodities (CFD), Bonds (CFD)
  • Platforms: MetaTrader 4, MetaTrader 5, Copy trading
  • Regulators: Australia, BVI, Ireland, Japan, South Africa, UAE
  • Incorporated: 2006

$100
deposit

1:400
leverage

Instant
execution

$100
deposit

1:30
leverage

Instant
execution

$100
deposit

1:400
leverage

Instant
execution

$100
deposit

1:30
leverage

Instant
execution

$100
deposit

1:400
leverage

Instant
execution

LiteFinance (LiteFinance.com), formerly LiteForex, is an ECN broker headquartered in Russia. Trade CFDs on a wide range of markets on Metatrader 4 or 5, with flexible leverage up to 1:500. LiteFinance accepts all EAs and trading styles, including scalping and news trading.

  • Risk warning: 83% 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.
  • Markets: Forex (CFD), Cryptos (CFD), Stocks (CFD), Indices (CFD), Metals (CFD), Energy (CFD)
  • Platforms: MetaTrader 4, MetaTrader 5, Copy trading, Mirror trading
  • Regulators: CySEC, Saint Vincent and the Grenadines
  • Incorporated: 2005

$50
deposit

1:500
leverage

Market
execution

$50
deposit

1:500
leverage

Market
execution

HotForex (HotForex.com) is an award-winning Forex and CFD broker, with accounts tailored to new and experienced traders. Trade a wide range of markets including Forex, stocks, indices and commodities through MetaTrader 4 or 5.

  • Markets: Forex (CFD), Stocks (CFD), Indices (CFD), Metals (CFD), Energy (CFD), Commodities (CFD), Bonds (CFD)
  • Platforms: MetaTrader 4, MetaTrader 5, Currenex, Copy trading, Mirror trading
  • Regulators: CySEC, France, Germany, Mauritius, South Africa, UK
  • Incorporated: 2010

$5
deposit

1:1000
leverage

Market
execution

$100
deposit

1:500
leverage

Market
execution

$100
deposit

1:500
leverage

Market
execution

FxPro (FxPro.com) is a global broker, winner of 60+ awards including "Best MetaTrader Broker" in 2020 and "Best FX Provider" three times in a row. Trade 250+ instruments across a wide range of asset classes on MT4/5 or cTrader. FxPro accepts all Expert Advisors and even provides an EA back-testing service.

  • Risk warning: 79.78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs and Spread Betting work and whether you can afford to take the high risk of losing your money.
  • Markets: Forex (CFD), Cryptos (CFD), Stocks (CFD), Indices (CFD), Metals (CFD), Energy (CFD), Commodities (CFD)
  • Platforms: MetaTrader 4, MetaTrader 5, cTrader, Copy trading
  • Regulators: Bahamas, CySEC, South Africa, UK
  • Incorporated: 2006

$500
deposit

1:200
leverage

Instant
execution

$500
deposit

1:200
leverage

Market
execution

$500
deposit

1:200
leverage

Market
execution

$500
deposit

1:200
leverage

Market
execution

Start trading in 40 seconds, with no prior identity checks, with PrimeXBT.com. PrimeXBT's trading platform was voted "Best Platform for Trading with Leverage" in the 2020 ADVFN International Finance Awards.

  • Markets: Forex (CFD), Cryptos (CFD), Indices (CFD), Metals (CFD), Energy (CFD)
  • Platforms: Copy trading, Mirror trading
  • Regulators: None
  • Incorporated: 2018

$10
deposit

1:1000
leverage

Market
execution

LQDFX (LQDFX.com) is an international Forex broker and CFD provider headquartered in the Marshall Islands. It delivers STP execution on MT4 across 71 currency pairs, indices and commodities.

  • Markets: Forex (CFD), Indices (CFD), Metals (CFD), Commodities (CFD)
  • Platforms: MetaTrader 4, Mirror trading
  • Regulators: Marshall Islands
  • Incorporated: 2015

$20
deposit

1:500
leverage

Market
execution

$500
deposit

1:300
leverage

Market
execution

$20
deposit

1:300
leverage

Market
execution

$500
deposit

1:300
leverage

Market
execution

$25000
deposit

1:100
leverage

Market
execution

Trade without restrictions with OctaFX (OctaFX.com), an international broker headquartered in St. Vincent & The Grenadines. Access CFDs on currency pairs, indices, precious metals and commodities on MetaTrader 4, MetaTrader 5 or cTrader.

  • Markets: Forex (CFD), Cryptos (CFD), Indices (CFD), Metals (CFD), Energy (CFD)
  • Platforms: MetaTrader 4, MetaTrader 5, cTrader, Copy trading
  • Regulators: CySEC, Saint Vincent and the Grenadines
  • Incorporated: NA

$100
deposit

1:500
leverage

Market
execution

$500
deposit

1:200
leverage

Market
execution

NordFX (NordFX.com) is an international Forex broker serving traders worldwide from its headquarters in Mauritius.

  • Markets: Forex (CFD), Cryptos (CFD), Stocks (CFD), Indices (CFD), Metals (CFD)
  • Platforms: MetaTrader 4, Copy trading
  • Regulators: Mauritius
  • Incorporated: 2008

$10
deposit

1:1000
leverage

Instant
execution

$250
deposit

1:1000
leverage

Market
execution

$500
deposit

1:1000
leverage

Market
execution

$
deposit

1:5
leverage

Market
execution

HYCM (HYCM.com), formerly HY Markets, is an award-winning regulated online broker. Trade over 300 instruments on fixed or variable spreads over MetaTrader 4 or 5.

  • Risk warning: 85% 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.
  • Markets: Forex (CFD), Cryptos (CFD), Stocks (CFD), Indices (CFD), Metals (CFD), Energy (CFD), Commodities (CFD)
  • Platforms: MetaTrader 4, MetaTrader 5
  • Regulators: Cayman Islands, CySEC, UAE, UK
  • Incorporated: 1977

$100
deposit

1:500
leverage

Instant
execution

$100
deposit

1:500
leverage

Instant
execution

$200
deposit

1:500
leverage

Instant
execution

Trade Forex as well as CFDs on cryptocurrencies, stocks, indices and commodities with an STP/ECN broker. EagleFX (EagleFX.com) allows all trading styles and Expert Advisors on MetaTrader 4.

  • Markets: Forex (CFD), Cryptos (CFD), Stocks (CFD), Indices (CFD), Metals (CFD), Energy (CFD)
  • Platforms: MetaTrader 4
  • Regulators: None
  • Incorporated: NA

$10
deposit

1:500
leverage

Instant
execution

$10
deposit

1:500
leverage

Market
execution

  • Risk warning: 71% 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.
  • Markets: Forex (CFD), Cryptos (CFD), Stocks (CFD), Indices (CFD), Metals (CFD), Energy (CFD), Commodities (CFD), Bonds (CFD)
  • Platforms: MetaTrader 4, Mirror trading
  • Regulators: Australia, Belarus, Canada, CySEC, UK
  • Incorporated: 2013

$100
deposit

1:30
leverage

Instant
execution

$100
deposit

1:30
leverage

Instant
execution

$100
deposit

1:200
leverage

Instant
execution

1. Gold CFDs: Contracts for Difference

If you only want to profit from changes in the price of gold, without having to worry about storage or insurance considerations, you could invest in Gold CFDs (contracts for difference) with AvaTrade or FxPro.

If you expect gold to rise above its current price of US$ 1,000 per ounce (fictional price, for illustration), you could invest US$ 10,000 to buy 10 CFDs. If the price of gold were to rise by $100, you could net a US$ 1,000 profit (excluding any charges your broker may levy).

CFDs are popular with investors like you because they allow you to significantly increase your profit through gearing, also known as leverage. CFDs brokers only require that you invest an initial margin, which can be as low as 1% of the trade's size, because they will lend you the difference. If your initial margin is 1% and you were to invest US$ 10,000, you could buy 1,000 CFDs (instead of 10, without leverage). A US$ 100 rise in the price of gold could deliver a US$ 100,000 profit.

In practice, leverage is a double-edged sword that can increase your gains and losses. If prices move against you, your broker may ask you to make further deposits or close your position altogether. This is why gold CFD brokers that provide negative balance protection are popular with investors.

2. Gold ETCs: Exchange Traded Commodities

You could also speculate on the price of gold without taking physical delivery through Exchange Traded Commodities (ETCs). ETCs can track the performance of a single commodity or a commodity index. Gold and precious metal ETCs are often backed by the physical commodity itself, held with a custodian. Because ETCs are listed on exchanges, you can buy and sell them in the same way you invest in shares.

ETFS Physical Gold (PHAU) is a Sharia-compliant ETC that tracks movements in the spot price of gold, less a management fee and any charges your broker may levy. It is backed by physical gold held with HSBC Bank, the custodian. Only metal that meets the London Bullion Market Association's (LBMA) rules for Good Delivery can be accepted by the custodian. Each physical bar is segregated, individually identified and allocated.

You can trade CFDs on this ETC through Plus500. Visit http://www.plus500.com/Instruments/GOLD.AX to find out more.

3. Shares in gold mining companies

Last but not least, you could trade the shares of gold mining companies to get exposure to the price of gold. However, this would not give you as clean a read on the price of gold, as stock prices are driven by many factors above and beyond the price of gold. You should carefully assess the companies you plan to invest in on their own merits. A company's management team, the strength of its balance sheet and operations are some of the factors to consider.

4. Gold bullions: gold bars or coins

If you're new to investing in gold, you're probably familiar with the gold bars (or ingots) held in vaults by central banks. These gold bricks weigh a standard 400 oz (troy-ounce) or 12.4 kg. However, gold bars come in many different sizes and shapes, from just 1 gram to 1 kilogram.

You could also purchase gold coins. Examples include the American Golden Eagle, the Australian Gold Nugget, the British Sovereign, the Canadian Maple Leaf and the South African Krugerrand. Some of these coins, called numismatic coins, are more expensive than other because they have rarity value as collectibles.

Together, gold bars and coins are known as bullions. You can purchase them online from a number of reputable websites. You'll also need to decide whether to keep your gold at home, or store it securely in a bank's safety deposit box for example. You should also consider specialised insurance to protect your investment from loss or theft.


Featured brokers

FxPro

MT4 Floating - Instant Execution

Trade 70+ currency pairs, spot indices, energies, metals and shares on floating spreads and instant ... More

  • $500 deposit
  • 1:200 leverage ?
  • 1.71 pips EUR/USD
Risk warning: 79.78% of retail investor accounts lose money when trading CFDs with this provi... More

AvaTrade

AvaTrade Account [BVI]

Trade 55 currency pairs on fixed spreads, plus CFDs on crypto-currencies, stocks, indices, bonds and... More

  • $100 deposit
  • 1:400 leverage ?
  • 0.9 pips EUR/USD
Risk warning: 79% of retail investor accounts lose money when trading CFDs with this provider... More

HotForex

Premium Account

Trade Forex as well as CFDs on shares, indices and metals on floating spreads without commission. ... More

  • $100 deposit
  • 1:500 leverage ?
  • 1.2 pips EUR/USD

AvaTrade

Professional Account [EU]

Trade 55 currency pairs on fixed spreads, plus CFDs on crypto-currencies, stocks, indices, bonds and... More

  • $100 deposit
  • 1:400 leverage ?
  • 0.6 pips EUR/USD
Risk warning: 79% of retail investor accounts lose money when trading CFDs with this provider... More