GOLD TRADING DUBAI | 5 OCTOBER 2024

Gold Trading in Dubai, there are two ways to speculate on the future price movement of gold markets: trading and gold investing. Investing in gold entails taking ownership of the item up front and making money if the price of the precious metal increases. You will not be acquiring ownership of the actual asset when you trade gold; rather, you are taking a position on the underlying price rising or dropping. Depending on whether you are interested in the actual commodity or not, you can trade or invest in a variety of gold assets. These consist of:

• Gold bullion

Both banks and individual investors frequently use physical gold, such as coins and bars, as a store of value. However, more active investors are frequently discouraged from purchasing the metal outright due to the costly storage and insurance requirements.

• Spot gold

The cost of purchasing gold up front, or on the spot, is known as the spot price. Typically, it is the cost of one troy ounce of gold. One common way to gain exposure to bullion without actually owning the precious metal is to trade spot gold.

• Gold futures

With futures contracts, you can trade gold for a predetermined amount on a predetermined future date. Whether it’s through a monetary or physical settlement, you would be responsible for keeping your half of the bargain. Only the price of futures contracts is determined by market forces; the quantity and quality of these contracts are standardised.

• Gold options

Contracts for options function similarly to futures, but there is no requirement to execute the trade at the time of purchase. You can trade physical gold or gold futures at a certain price on a specific date with options. Put options allow the holder to sell the precious metal, while call options allow the holder to purchase it.

• Gold ETFs

A basket of shares of publicly traded gold mining, refining, and production businesses are tracked via exchange-traded funds (ETFs). ETFs are a common method of portfolio diversification because trading or investing in them provides you with far greater exposure than you would from a single investment. ETFs are passive investments that mimic market returns instead of aiming to beat them.

• Gold stocks

Investing in equities or trading on them can be excellent ways to gain indirect exposure to gold. You can learn about all aspects of the gold industry, including funding, sales, production, and mining. It’s crucial to remember that a variety of other factors influence share values, so gold stocks don’t always move in the same manner as bullion.

GOLD TRADING DUBAI | 5 OCTOBER 2024