Gold Trading Guide UK - Learn How to Trade Gold Online

Last Updated October 15th 2020

Gold Trading UK | How to Trade Gold for Beginners

In this article, we will cover all the important information about gold trading in the UK, including a step-by-step guide on how to get started with trading gold. 

Traders who favour investing in gold above any other asset are fondly referred to as 'gold bugs' in the finance sector. This shiny and ever so opulent asset class has been holding its value since around 700 B.C. 

As such, it makes sense for gold to be an attractive choice when it comes to trading or investing. 

In some cases, UK traders prefer to speculate on the short-term value of gold - with seasoned investors constantly looking to profit from ever-changing price movements. At the other end of the spectrum, others prefer to invest in the long-term value of gold by taking a ‘buy and hold’ strategy. 

In our UK Gold Trading Guide, we’re going to delve into what trading gold consists of and ways in which you can access the market. Not only that, but we also talk about the pros and cons of trading gold and how to sign up with a gold trading platform today!

Contents:

1. What is Gold Trading?

2. How is the Cost of Gold Decided?

3. How is the Cost of Gold Measured?

4. When can Gold be Traded UK?

5. Different Ways to Trade Gold Online in the UK

6. How to Invest in Gold Long-Term in the UK

7. Advantages of Trading Gold

8. How to Make a Profit Trading Gold

9. Trading Gold Online: Fees Involved

10. Best Gold Trading Strategies to Consider

11. Trading Gold Online: Fees Involved

12. Gold Trading Tips for Beginners

13. How to Begin Trading Gold Online in the UK: Four Easy Steps

14. Conclusion

15. Gold Trading - FAQs

What is Gold Trading?

Generally speaking, to trade gold is to buy and sell it - with the goal being to make financial gains. Having said that, there are a variety of different ways in which to access this popular asset class from the comfort of your home. Much like forex and stocks, you are predicting whether the value of gold is going to rise or fall. 

More times than not, people who actively trade gold do so on a short-term basis, such as day trading. In this scenario, the trade might only stay open for a matter of hours, or even just minutes in some cases. When it comes to swing trading gold, these positions can be held open for weeks at a time before being sold. 

The most common way to trade gold has to be CFDs, especially at times when the economy is uncertain.  Just in case you aren’t familiar with gold CFDs - a ‘contract for difference’ enables you to trade the instrument without you physically owning it. 

Gold CFDs on platform’s such as eToro perform particularly well when it comes to short-term trading strategies. This is because gold CFDs can be traded commission-free and you’ll always have the option of going long or short. The contract will always reflect the market valuation of the asset in question - measure for measure. 

If you consider yourself more of a long-term UK investor, then you will probably want to avoid gold CFDs. It could be a good option for you to instead buy gold bullion (or bars). That way, you will actually own the tangible asset (in this case gold). The best way to do this is probably in an indirect manner through an ETF. 

For those of you who have no experience when it comes to trading gold, we are going to dive into the various ways you can do this later. First, we are going to delve into how the price you pay for gold is determined, followed by how it is quantified.

How is the Cost of Gold Decided?

In a nutshell, the price of gold is determined in the same way as other assets - the valuation of it is heavily driven by the supply and demand of the markets. This sentiment can fluctuate on a daily basis, and so the value of gold is heavily dedicated by the economic process, and market forces.

If stock markets around the world are going through a particularly turbulent time the valuation of gold will usually rise up. On the contrary, when the stock markets are healthy - the valuation of gold is often lower, due to the demand for gold being lower.

How is the Cost of Gold Measured?

When it comes to how this asset is measured or quantified, you will usually find that assets are valued using a specific currency such as GBP or USD. For instance, American companies like Nike and Facebook will be priced in US dollars.

As regards gold - various different metrics can come into play.  In some trading markets, you will find gold measured by the kilo, in ounces, or by the gram. Generally speaking, gold is priced in US dollars. The reason being that USD comprises 60% of all forex reserves in big central banks. The same goes for commodities such as natural gas and oil etc.

Consequently, when trading gold via a UK broker such as eToro (which already uses USD), all you need to do is pay a small conversion fee of 0.5% and your trade is automatically exchanged to US dollars from your native British pound. 

At this time on the aforementioned broker platform, the price of gold is $1,896.90 for an ounce.

When can Gold be Traded UK?

As with any market, opening times can vary depending on the exchange and country in question. The exception to this rule is gold. 

Gold can be traded 24 hours a day, 7 days a week. The reason this asset is available at any time is that it is traded on a global scale, and therefore in various markets from around the world (which have different trading hours).

Here in the UK you can usually trade, as well as buy and sell, gold 5 days per week (24/5). Most online platforms in the UK will offer gold trading hours of Monday 00:00 through to Friday 22:30. There is a standard daily break between the hours of 23:00 and 00:00.

Different Ways to Trade Gold Online in the UK

trading gold in the uk

In this part of our UK gold trading, we are going to talk about the various ways in which you are able to trade and invest in gold.

There are many ways to trade gold online, some methods are more popular than others. Ultimately, the method that you opt for will depend on your long-term financial goals. 

Here’s what you need to know. 

Trade Gold - via Forex Pair

One way in which you are able to trade gold is via a forex pair. For example, you can trade XAU/USD - which is essentially you trading gold against the US dollar.

In order to hedge against inflation caused by geopolitical turmoil, and various other factors that can affect the cost of currencies - investors often utilise gold. 

By hedging gold against another asset, such as an FX currency, you are able to reduce risk at times of dramatic changes in currency valuation.

Trade Gold - CFDs

The main market for trading gold is via CFDs. It’s the most popular way to trade gold on a short-term basis. As we previously cited, the main aim of gold CFDs is to monitor the price shifts of the asset, on a second by second basis.

For example:

  • You head over to popular UK trading platform eToro and the value of gold CFDs has risen by 0.23%
  • Similarly, the global spot price of gold has also increased by 0.23% 
  • If on the other hand, the spot market price of gold has fallen by 0.15% - again this will be reflected in the CFD in question.

The amount it will cost for you to utilise CFDs in the UK is minimal, and trading costs are super competitive. Moreover, this means you can make the most of ultra-tight spreads - and hopefully use leverage to your advantage.

For those not in the know, leverage is a little bit like a loan from the broker. It enables you to trade gold with up to 20 times more than you physically have in your trading account. Leverage for gold is capped at 1:20 due to limits imposed by the European Securities and Markets Authority (ESMA) - which in turn is enforced by the Financial Conduct Authority (FCA).

If you applied that maximum leverage to your gold CFD on a regulated platform such as eToro, you could potentially turn a £200 balance into trading capital of £4,000.

In addition to the benefits of leverage - gold CFDs enable you to benefit from the value of gold falling as well as rising. This is achieved by electing to ‘go short’, which is essentially going to result in you making gains from the price decline.

Below you will see an example of how gold CFD trading looks:

  • Per ounce, eToro quotes a price of $1,896.90 for gold.
  • You have a feeling that the price will fall within an hour or two
  • Due to your premunition, you place a sell order worth £1,000
  • The value of gold falls by 1.8%
  • On your £1,000 stake, you made quick gains of £18

Now let’s imagine you had decided to apply leverage of 1:20 as offered. In doing so, your £18 profit would have been increased to £360 (£18 x 20). 

With that said, it’s important to remember that whilst leverage can work in your favour - it can also go against you. Trading CFDs with leverage is risky business, so always carefully weigh up your options and conduct your own research before taking the plunge.

Buy Gold via ETFs

Gold ETFs enable you to buy gold in the traditional sense, on an indirect basis. You can do this with FCA broker eToro on a commission-free basis with a small minimum investment in place of just $50. 

As you might have noticed, we’ve used eToro as an example of pricing throughout this UK gold trading guide. Not only because it is super simple to use, but also for its commission-free trading, competitive spreads, and support for various UK payment methods. 

Nevertheless, another way in which you are able to invest in gold is via gold mining companies. These days, thanks to online brokers falling over themselves to provide financial services to traders and investors - it’s super easy to invest in mining operations from all over the world.

The first one that springs to mind is VanEck Vectors Gold Miners - which can be bought via an ETF on eToro. VanEck has been around since 1955 so is well established. If this is something that interests you, the aforementioned ETF essentially gives you access to a variety of big companies involved in the gold mining space.

Some of the largest holdings include Newmont Corp, Barrick Gold Crop, and Franco-Nevada at a weighting of 11%, 11%, and 6% - respectively. In terms of where the gold mines are located - 45% are based on Canada. You then have mining operations in the US, Australia, Brazil, South Africa, China, and more.

Trade Gold Options

In terms of gold options contracts, it’s widely considered to be an advanced form of trading. When trading this way you are trading based on the price of gold in the future. But, options do not require you to purchase the asset in full. Instead, you’ll only need to pay a small deposit - which is known as the ‘premium’. 

If you think the price of gold is going to go up in value you can purchase a ‘call option’. This means that you have the right, but are in no way obligated, to purchase gold at a particular price - and for a predetermined amount of time (within the contract expiry date). If you think the price of gold will go down, then you’ll be purchasing a ‘put option’. 

Crucially, if you purchase gold call options, you need the price of gold to go above the strike price of the contract. Again, if you opt for put options, then you want the opposite to happen. 

For example:

  • You think that the value of gold will go down in the coming weeks
  • As such, you purchase put options with a 3-month expiry
  • The strike price on the gold options is $1,800 - meaning that you need the price of gold to fall below this figure
  • You pay a premium of $150 per contact to access the market
  • A few weeks later, the price of gold goes down to $1,500
  • This means that you make $300 for each options contract that you hold
  • But, you also need to subtract the $150 premium that you paid - leaving you with a net profit of $150 per put options contact

On the other hand, had the price of gold increased and thus  - failed to move below your $1,800 strike price before the contracts expired, then you would have simply lost your $150 premium. This is why gold traders in the UK often opt for options, as they offer a low-risk method to access the market.  

Trade Gold Futures

When it comes to gold futures, they are very similar to the aforementioned gold CFDs.

The reason for this is that investors are able to select from both ‘buy’ and ‘sell’ orders - not to mention being able to apply leverage. As we covered earlier, leverage must be applied within ESMA limits for UK and European traders.

Whilst there are obvious similarities between gold CFDs and gold futures - there are also 2 stark contrasts to consider - they are as follows:

  • Unlike gold CFDs, futures come with an expiration date. The expiration date will depend on the contract, but this is usually at the same point every month the 3rd Friday). Crucially, after that date has passed the gold futures can not be traded and must be settled.
  • Gold futures contracts are commonly split into four or more dates of expiry per year. To give you a brief example, you would have a gold futures contract which is active for 3 months, 4 times a year.

In the above scenario, after the 3 months is up the person holding the underlying asset must either sell or buy it. In the vast majority of cases, your gold futures will be settled in cash. On the plus side, this means you don’t need to have a truckload of gold delivered to your home if you miss your expiry date!

How to Invest in Gold Long-Term in the UK

Some of the gold trading methods detailed above are considered short-term investments. You could be forgiven for thinking that gold futures are long-term trading - however, these rarely surpass a 3-month timeframe.

If you consider yourself a long-term investor, there are specific markets that you should stick with. At the forefront of this is using a gold ETF - which allows you to buy gold bullion indirectly with a large-scale financial institution like iShares. Crucially, the gold ETF is backed up by the desirable asset.

As and when the buying price of gold fluctuates, this will be reflected in your gold ETF. You won’t have a tangible bar of gold, but the chances are you are investing in order to potentially increase your capital. With gold now being one of the most sought-after asset classes by UK investors, the end-to-end ETF process can be accomplished online at the click of a button. 

Advantages of Trading Gold

Undecided whether gold trading is the right move for your investment portfolio? If so, we have put together some of the biggest advantages of having access to gold via your chosen UK broker.

Significant Volumes of Trade

Did you know that gold has the third highest trading volume in the investment arena? This makes it ones of the most liquid financial assets in the world.

The liquidity of this market is great news for you as an investor as in turn you can make the most of super-tight spreads. As such, gold trading can be a very advantageous and lucrative space for those that have the right strategy in place. Don’t worry - we cover UK gold trading strategies later in this guide. 

Gold Leverage Limits

In the traditional gold market arena, investors are only able to purchase the asset at a value equal to their account balance.

However, as we noted earlier, brokers such as eToro enable UK traders to access gold CFDs via leverage. The leverage offered will not be more than 1:20, but that does mean that you are able to amplify your gains by as much as 20 times your investment budget.

Ability to Long (buy) and Short (sell)

UK trading platforms allow you to go ‘long’ and ‘short’ on gold effortlessly. As we briefly covered, you simply need to head over to your chosen broker and select gold futures or gold CFDs. Finally, it’s then just a case of choosing from a buy or sell order.

This isn’t an option when buying gold in the traditional sense - as you will only make money if the value of gold increases. 

Hedging Your Portfolio

As we have touched on throughout this guide - global geopolitical events can play a big part in the supply and demand of gold - thus causing price shifts.

One of the major world events to affect the price of gold was the most recent financial crisis, which took place in 2008. Many major stock markets experienced bearishness over a period of time - whilst gold was the complete opposite.

For this reason one of the most popular ways to hedge against descending markets is to add gold to your investment portfolio.

Provides a Liquid Investment When Traded Online

You don’t necessarily need to buy a physical bar of gold to invest in this liquid asset. Irrelevant of whether you decide to trade gold via CFDs, options, futures or ETFs- if you want to cash in that investment - you can get rid of your gold at the click of a mouse. 

The funds will then be placed in your trading account. Once again, this isn’t something that you can do with ease when you buy physical bars of gold bullion. After all, you will need to store, transport it - and subsequently find a buyer. 

How to Make a Profit Trading Gold

make profit trading gold

The age old question when it comes to trading any asset is - how can I make lots of money? The answer is not a simple one. However, much like with other assets, the key is to successfully forecast the direction of the relevant market.

To give you a couple of examples:

Scenario 1:

  • You go long on gold
  • The price of gold rises
  • You make a profit

Scenario 2:

  • You go short on gold
  • The price of gold falls
  • You make a profit

Having a crystal ball would be helpful in all aspects of life - let alone during our trading endeavours. However, the reality is that there are no guarantees of being triumphant when predicting the future of any market. Also, it’s important to remember that the amount you invest will dictate how high your potential profits could be.

Experienced traders tend to set themselves trading targets, such as a certain amount per week, or per month. Of course, there is no definitive answer when it comes to how to make quick money.

Should you need further investment strategy inspiration,  check out the section below. 

Short-Term Gold Investing

etoro trading gold

If you prefer the idea of short-term investing over long-term. - then have you considered ‘day trading’ gold? Rather than keeping market positions overnight, you may just hold them for a matter of hours, or even a few minutes.

Day trading gold is really popular with people who like to trade in a much more steady manner - meaning you can benefit from small profits, but on a regular basis.

Below you will find an example of day trading gold CFDs:

  • Let’s imagine, you place a £200 order to buy a gold CFD on eToro
  • You decide to add leverage of 1:10
  • The total value of your investment stake now stands at £2,000 (10 x £200)
  • Now, let's say the value of gold rises and is 1.5% higher
  • Had you staked £200 without leverage you would have made £3
  • However, with 1:10 leverage you’ve made £30 instead

That said, if you are serious about trading gold, you need to be mindful of trading fees associated with your chosen broker. We are going to discuss this in more detail later on. 

Long-Term Gold Investing

Some investors don’t have the time to trade in the short-term. After all, it can take hours upon hours in researching the relevant markets - not to mention having to place various trades. Then there’s technical analysis, chart reading and following the latest financial and economic news.

If you don’t have the time to actively day trade, then it could be that investing gold in the long-term is a better option for you. Ultimately this depends on your own long term goals. Don’t forget - short-term price fluctuations will probably be unappealing to you if you want to hold onto your investments for years at a time.

We’ve put together an example for your consideration:

  • Let’s say you decide to invest £2,500 into a gold-backed ETF
  • Your investment value is going to fluctuate, mirrored by the quoted price of gold, globally
  • Fast forward to 2 years after your ETF investment
  • Gold is now valued at 20% more than your initial buying price
  • From your investment of £2,500, your profits would be £500
  • You ‘cash out’ the above investment
  • The funds are added to your brokerage account

This means that you are now able to request a withdrawal, and use that money to invest in any other assets of your choosing.

Trading Gold in the UK: Risks Involved

We couldn’t put together a UK gold trading guide without talking about the risks involved. As with any other form of trading, potential gains when buying and selling gold in the UK can easily turn out to be losses.

It has to be said that inexperienced investors often end up facing losses when trading gold. Nine times out of ten, this is down to a failure to properly understand the market in question. Whether it’s gold or forex, it is vital to spend some time researching and learning as much as you can about the gold markets.

A great start for any newbie trader is to utilise the tools available to you. This way, you can hone in on your skills - thus giving you a better chance at success.

Best Gold Trading Strategies to Consider

As we just touched on, learning the ins and outs of the gold markets is a great way to expand on your skills. 

Along with learning charts and such, we have put together some commonly used UK gold trading strategies - all of which we think could help you in the future.

Swing Trade Gold

If you want to swing trade gold, you will be following the wider market sentiment. Let’s say that gold is going through a strong period. A seasoned swing trader will generally try to maintain the ‘buy’ position throughout the rising trend. 

Should the momentum be slowing down, you would probably decide to exit the position you previously held open. Let's assume that what comes up must come down, and as a result, the price of gold is falling. In this scenario, you would likely change your order to ‘sell’. 

As you can see, the nature of swing trading offers investors a flexible way of trading, which can result in your position being kept open for months, weeks or days at a time.

Utilise Gold Support Levels

gold trading, support and resistance levels

When trading gold in the UK - so-called ‘support levels’ are a particularly helpful tool. The support level we are talking about is a ‘price level’ which helps traders recognise resistance and support areas.

Caused by a downtrend, a temporary ‘stop’ can be implemented on the price level. Not only that, but this level can be considered a floor - which essentially stops prices being dragged in a downward direction.

Recognising this support level illustrates a window of opportunity for purchasing gold. A common strategy amongst gold traders is to go into the market just above the support line. The next step is to enter a stop-loss below that same line. This ensures that this gold trading strategy can be undertaken in a risk-averse manner. 

Combine Gold and Forex

Gold and forex have a lot more in common than you might think.  The most obvious comparison is that both of these highly influential assets can often be traded 24 hours a day, 7 days a week. Of course, 1 unit of gold is the same as the next, so it’s super exchangeable and perfect for trading.

Gold has been used as a currency for nearly 3,000 years. It’s movable, it can be fractioned off, and it’s very easily certified. As a way of regulating the market, gold is usually traded in USD - hence why it’s in the interest of gold traders to keep abreast with the latest US dollar news.

Whilst there are no set in stone assurances, gold and the US dollar generally relate to each other the same as any other FX pair. That is to say, when the value of one rises, the other one falls.

On the flip side, the value of currencies is dictated by a variety of things such as geopolitical turmoil, natural disasters, and economic unrest. Whereas the value of gold is decided by more than just the price shifts of the dollar. In comparison to currencies, such as the Venezuela bolívar, gold is extremely resilient to hyperinflation and economic war. 

When we look at what happened to countries like Venezuela, Egypt, Zimbabwe, and Belarus - it’s clear to see why investors flock to gold as a safety net. This asset works well as a way of hedging against the aforementioned inflation and collapse of currency value.

A commonly used strategy is to counteract the forex market risk by moving capital over to gold, just until the market is less volatile.

Gain an Understanding of Gold, Interest, and Inflation

When it comes to analysing the gold market for traders, it’s often centred around reserve banks and financial policies. Having an understanding of the relationship that gold has with interest rates and inflation is another helpful strategy when trading gold in the UK. 

Gold performs as a hedge at odds with inflation and quantitative easing (QE) announcements. QE is a little complex, however the crux of it is that it is a way of increasing the supply of money in order to motivate the domestic economy. Given that gold is usually priced using US dollars, it greatly affects the US consumer price index.

In terms of interest rates - this and the value of gold are not directly interrelated. However, it’s undeniable that soaring interest rates turn investors off gold. The reason being, higher interest rates give bigger returns to investors. These investors might be looking to withdraw funds out of the market (gold) or add funds into a savings account. Moreover, it has been known for interest rates and gold to go in the same direction.

A ‘real interest rate’ is the nominal interest rate, without inflation. If you ever wanted to track this interest rate for yourself, one way of doing this is to take the nominal rate and simply subtract the inflation.

Scalp Trade Gold

In order to scalp trade gold, you will be placing multiple buy and sell orders during a trading day. The aim of scalping is to ‘scalp’ the tiny profits created from dozens of trades. It might be the case that the quoted price of gold stays within the same price range for weeks at a time. 

For example, a tight range on the price of gold could be something like $1,800 - $1,900. This tight range we are referring to is of no use to volatility-seeking swing and day traders - but is perfect for scalping.

UK gold scalpers are able to buy and sell various positions to their heart's content - at least, for the length of time that the price of gold falls within the consolidation area.

Gold Trading strategies

Trading Gold Online: Fees Involved

When it comes to gold trading online in the UK, there are fees to consider before you get started, 

Spreads

Spreads are unavoidable. In a nutshell, it is the difference between the purchase price, and the selling price of gold (or whatever asset you’re trading).

No matter which online broker you choose, the nature of trading means that spreads can change many times a day. After all, the market sentiment, as well as supply and demand in general is prone to fluctuate and shift.

Therefore when you are looking at a volatile market - the spread will likely be much wider. When it comes to gold CFDs at eToro, for example, at the time of writing you might expect around 45 pips.

Commission Fees

Many online brokers charge commission fees to traders, with some UK platforms charging in excess of £10 for each trade. Others charge a percentage on the volume of your gold investment.

Simply deposit the minimum amount required into your eToro account and the social trading platform will allow you to invest in gold ETFs and gold-related shares - with zero percent commission at all times

To give you an idea of how these commission charges can add up, check out our example below:

  • Imagine ABC Brokerage charges clients £12 commission
  • You decide to purchase £125 worth of Hochschild Mining PLC shares, and £125 of Newmont Mining Corp shares
  • The above example is 2 different trades, so ABC charges you £24 commission
  • Let’s say a couple of weeks later you decide to sell your shares
  • This is an additional 2 trades - ABC Brokerage again charges you another £24
  • Just for buying and selling 2 different shares your broker has charged you £48 in commission

Had you chosen a commission-free broker to trade gold, you would have saved yourself £48.

Transaction Fees

Transaction fees are not uncommon in the online broker space. That said, being charged for deposits and withdrawals can be avoided.

With so much competition in the investment sector, you will find heaps of brokers who will not charge you a penny to withdraw your own money. It’s always advisable to check out the fees for yourself before signing up to any brokerage site. After all, these things are subject to change.

Overnight Financing Fees

If it turns out gold CFDs is your thing, you need to be informed and switched on when it comes to overnight financing fees.

In case you aren’t aware, this fee is charged when a position is kept open overnight. The fee is usually calculated relative to the value of the trade. Sometimes called a swap or a rollover fee - it’s essentially an interest fee to counteract any leverage you might use.

Gold Trading Tips for Beginners

If you’re just starting out in the world of online gold trading - you might want to take a step back momentarily. After all, you’ll need to understand how to read pricing charts and deploy technical indicators. 

You also need to understand how to intercept economic and financial news - and how this might impact the market value of gold. The good news is that there are several solutions available to UK investors that will allow you to trade gold without you needing to have heaps of experience. 

Gold Trading Demo Accounts

The obvious starting point as a newbie gold trader is to open a demo account with an online broker. This allows you to buy, sell, and trade gold using paper money - meaning that you are taking no risks whatsoever. 

This is a great way to learn how the gold trading scene works - as the best demo account facilities will mirror live trading conditions. This is the case with eToro - which offers all UK traders a demo account that comes pre-loaded with $100,000. 

In addition to this, gold trading demo account allows you to test out new strategies. Once again, you’ll be doing this in a 100% risk-free manner, as there is no requirement to deposit any money.

Gold Trading Signals

Signals are hugely popular in the forex and cryptocurrency trading arenas. In more recent times, gold signals have since become a thing. 

For those unaware, your chosen signal provider will send you gold trading suggestions in real-time. For example, the signal might suggest placing a sell order when gold hits $1,750.

The best gold trading signals will also provide exit order values. This should include both a stop-loss and take-profit price, subsequently ensuring that your signals can be executed in a risk-averse manner.  

Ultimately, gold trading signals allow you to access the market without needing to perform any research or analysis. Not only is this conducive for those of you without the required knowledge to perform in-depth research ─ but also if you simply don’t have the time.  

Gold Trading Robots

In a similar nature to gold trading signals, robots allow you to access the markets without you needing to do any research. However, gold trading robots go one step further - as the technology will place buy and sell orders on your behalf. In this sense, it's essentially an extension to a signal service. 

In order to make use of a gold trading robot, you will first need to find a reliable provider. There are hundreds of options in the online space, but it’s best to spend some time researching the provider as there are many scam artists present. 

Once you find a robot supplier and pay the respective purchase price, you will then need to install the software into MT4. Then, it’s just a case of sitting back and hoping for the best - as the robot will trade gold on your behalf. 

Copy a Seasoned Gold Trader 

This option allows you to copy a seasoned gold trader like-for-like. eToro offers such a feature and requires a minimum investment of just $200. All you need to do is browse the many gold traders using the eToro website, and then determine how much you wish to invest. 

Then, your portfolio will mirror that of your chosen investor. This is yet another great way of trading gold in the UK in a passive manner - as you won’t need to do any research or place any orders. 

How to Begin Trading Gold Online in the UK: Four Easy Steps

Like the sound of trading gold and wish to get started with an account right now? If so, this section will get you set up with a gold trading account in just four simple steps. 

Step 1 - Open an Account

open a trading account

In order to trade gold online, you will first need to open an account with a regulated stock broker. While there are hundreds of platforms to choose from, we would suggest using commission-free broker eToro. You’ll have access to heaps of different gold trading instruments and the broker is highly suited for beginners. 

To get started, visit the eToro website and get the registration process underway. Here, you’ll need to enter some personal details - such as your name, home address, and date of birth. You’ll also need to supply your email address and UK mobile number. 

Note: eToro is licensed by the FCA - meaning that you will need to verify your identity before you can make a withdrawal (or deposit more than $2,250). To do this, simply upload a copy of your passport/driver’s license and a proof of address. 

Step 2 - Fund Your Account

If you want to trade gold at eToro with real money, you will need to make a deposit. The minimum deposit stands at $200 - which is about £160. 

You can choose from the following UK payment methods:

  • Bank transfer
  • Debit card
  • Credit card
  • Paypal
  • Skrill
  • Neteller

All payment methods - apart from a bank transfer, are instantly processed by eToro. 

Step 3 - Select a Market

gold trading market

Once you have made a deposit, you then need to think about the specific gold trading market that you are interested in. As we noted earlier in our guide, a long-term investment into gold is best facilitated via an ETF.

On the other hand, if you want to engage in day or swing trading, CFDs are going to be your best option. If you’re not sure which asset class you want to access, it might be worth spending some time with the eToro demo account. 

Step 4 - Set up a Gold Trade Order

As soon as you know which gold trading market you wish to access, it’s then just a case of setting up an order. 

This requires the following:

  • Buy or sell order - this depends on which way you think the price of gold will move
  • Stake - this is the amount that you wish to stake on the trade
  • Leverage - you can apply leverage of up to 1:20 when trading gold at eToro
  • Take-profit - enter the price that you want your gold trade closed at - based on your profit target
  • Stop-loss - enter the price that you want to exit the trade when your position goes against you

Once you confirm the order at eToro - your gold trading position will enter the live markets. 

To Conclude

Gold offers a great way to profit from the financial markets. What UK investors like best about this asset class is that it is super flexible. That is to say, you have the option of trading gold on a short-term basis - where you will be chasing smaller profit margins. 

On the other hand, you can also invest in gold over several months or years. This is a great way to protect your wealth from economic uncertainties and inflation. 

With that said. It’s best to have a firm grasp of how gold functions in the global financial system - as well as an understanding of how to perform fundamental and technical analysis. This will ensure that you don’t go into the UK gold trading scene with your eyes closed. 

Gold Trading - FAQs

Can I invest in tangible gold online?

Yes - the best way to buy gold online in the tangible sense is to invest in an ETF. The ETF will be managed by a large financial institution and backed by physical gold bullion. 

The value of the ETF will then move up and down in-line with the real-time price of gold. This allows you to invest at the click of a button - while at the same time, cash out your position at any given time. 

I want to trade gold online - where do I start?

In order to trade gold online in the UK, you’ll need to find a reliable online broker. Our top-rated platform eToro offers several gold markets - ranging from CFDs and ETFs.

Can I apply leverage when trading gold?

You certainly can. In fact, UK residents can apply as much as 20x when trading gold online. This means that a £500 balance would permit a maximum trade value of £10,000. 

Can I use a demo account to trade gold?

Yes - there are many online brokers that allow you to trade gold via a demo account facility. This is a great way to learn how gold trading works without risking any capital. 

What is the minimum investment value to trade gold?

This depends on several factors - such as the type of gold trading instrument you opt for and the respective brokerage site. If you simply want to invest in a gold ETF, then eToro requires a minimum of just $50 - which is about £40.

If you liked our article Gold Trading Guide UK - Learn How to Trade Gold Online, please give it a like and share with your fellow day traders.

Please note: Trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors.

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

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