9.1 Re-cap of Gold Beginner Course 

Module 1: Introduction to Gold Trading 

• Gold’s value is known for its rarity and stability, gold is valued as a store of wealth and industrial resource. 
  
• Once central under the gold standard, gold remains a favoured asset for hedging and wealth preservation. 
  
• Investors can trade gold via physical assets, ETFs or derivatives like CFDs and futures. 
  
• Physical gold offers direct ownership, while paper gold (ETFs, derivatives), allows easier access and liquidity. 
  
• Gold provides capital appreciation, portfolio diversification and a safe-haven during economic downturns. 
  
• Gold retains value amid economic turbulence, appealing to investors as a low-risk asset. 
  
• Gold prices are driven by demand (jewellery, investment), central bank purchases and a US dollar’s strength. 
  
• Essential terms include “allocated gold” (stored, owned, outright) and “caratage” (purity measure). 

Module 2: Types of Gold Investments 

• There are two ways to trade gold – trade physical gold, or trade gold securities. 
  
• The most popular form of physical gold for trading is gold bullion, which comes in bars, ingots and coins. Investment-grade gold must be at least 99.5% pure.
  
• Gold jewellery can also be considered a form of physical gold trading. However, pure gold is too soft and malleable, making it suitable for everyday wear. Hence, gold used for jewellery is often mixed with other metals; this impacts the investment value of gold jewellery. 
  
• Gold securities trading expands the scope beyond physical gold. It includes gold stocks, gold ETFs, and even derivatives like gold CFDS and gold futures. 
  
• Gold stocks are stocks of publicly listed companies involved in the mining and production or gold, or the financing of such activities. Listed jewellers may also be considered as gold stocks. Gold stocks often do well when demand for gold increases.
  
• Gold ETFs and mutual funds are investment funds that track the price of gold itself, or track the performance of a basket of gold stocks. 
  
• Gold futures allow hedging against future price swings of gold. Meanwhile, gold CFDs allow speculation in the price of gold, providing opportunities to potentially reap returns from both upswings and downtrends in the gold market. 
  
• Lesser known methods of investing in gold include gold certificates and gold accounts. 
  
• Gold certificates are issued by banks, certifying ownership of a quantity of gold. A valid gold certificate may be cashed in, or redeemed for gold bullion. 
  
• Gold saving accounts allow investors to buy, hold and sell gold electronically without needing to take delivery or store physical gold. Gold holdings are recorded in grams, and gold purchases may be bound to minimum quantities.

Module 3: Preparing Your Arsenal 

• Live and demo accounts can both be useful for traders of all levels, and even advanced traders can benefit by using a demo account to sharpen their trades.  
  
• The most popular platforms for trading forex are MT4 and MT5. The former is focused on forex trading, while the latter offers a wider range of assets. 
  
• Besides MT4 and MT5, Vantage also offers other trading platforms that may be useful for certain traders. WebTrader offers cloud-based trading via any web browser, ProTrader provides additional charting tools and technical indicators, while Vantage app facilitates seamless trading over mobile devices. 

Module 4: Essentials of Chart Reading 

• Gold charts – or more properly, price action charts – are an essential tool for traders to learn, as they provide basic but important information such as price trends and reversal points that may be potential trading opportunities.  
  
• Three common gold charts are line charts, bar charts and candlestick charts. Of the three, candlesticks provide more information than line charts while being easier to read than bar charts.  
  
• A candlestick chart is made up of individual candles, each representing a trading period (such as an hour, a day or a week, etc).  
  
• Candles are made up of a rectangle (the real body) and wicks or shadows on the top and bottom.  
  
• The length of the candle’s body tells us the difference in price between opening and closing. When the closing price is lower than the opening price, the candle is a bearish one and is traditionally coloured red. When the closing price is higher than the opening price, the candle is a bullish one, and is traditionally coloured green.  
  
• The length of a candle’s wicks tells us the difference between the highest/lowest price and what the price ultimately closed at. This can be taken as a measurement of market sentiment.  
  
• Long top wicks may be read as a bearish signal, while long bottom wicks may be read as a bullish signal. Short top wicks may be a bullish signal, while a short bottom wick may be a bearish signal. 
  
• Candlesticks reflect the trading activity of the period, and can thus appear differently from day to day. The appearance of certain candlestick shapes and patterns can indicate bullish or bearish trends.  
  
• Bullish candlestick patterns include the Hammer, Inverse Hammer, Bullish Engulfing, Three White Soldiers and Bullish Rising Three 
  
• Bearish candlestick patterns include the Hanging Man, Shooting Star, Bearish Engulfing, Evening Star, and Bearish Falling Three 
  
• Candlestick patterns do not guarantee the onset of a bullish or bearish trend. Instead, they should be taken as descriptions of price tendencies.  

Module 5: Basics of Fundamental Analysis in Gold Trading 

• Fundamental analysis is a core skill that all serious traders should learn. It is a method for determining the fair value of gold, understanding its price action, and can help with formulating trade ideas. 
  
• When applied to gold, fundamental analysis involves studying and understanding various geopolitical and macroeconomic factors.
  
• Economic indicators can impact gold prices. Some of them include:
  
  • Inflation rate and central bank interest rate
    
  • Strength of the US Dollar
    
  • Global economic stability 
    
  • Geopolitical events
    
• Being an important commodity, market demand and supply also impacts the price of gold. Three of the largest drivers of market demand are gold jewellers, central banks, and industrial applications. Meanwhile, the largest driver of gold supply levels are gold miners and production companies. 
  
• Investors should include the following sources of information and data when performing fundamental analysis for gold:
  
  • Financial statements from gold miners and producers
    
  • Prospectuses and reports from gold ETFs and gold fund managers
    
  • Economic reports such as GDP growth, employment rate and consumer sentiment surveys
    
  • News reports on monetary policies and interest rate announcements

Module 6: Basics of Technical Analysis 

• Technical analysis is a framework for traders to study the price action of a currency pair. Charting tools and technical indicators are commonly involved, and a trader who makes trading decisions mainly via technical analysis is known as a technical trader. 
  
• Using historical price and trading volume data, technical analysis allows a trader to discern the possibility of future price trends and events. 
  
• Technical analysis is often criticised for being too subjective; this is thought to arise from differences in how charting tools are employed, as well as differences in individual interpretations. 
  
• Technical analysis is most commonly done on a candlestick chart, where traders can study individual candlestick characteristics and candlestick patterns to  identify potential price reversals and incoming price trends.  
  
• Trendlines can be plotted on a price chart to better visualise price trends – uptrends, downtrends and sideways trends. This can help minimise risk. 
  
• Trendlines are also used to demarcate levels of support and resistance. Support levels represent a price floor, whereas resistance levels represent a price ceiling. 
  
• Depending on the state of the market, support and resistance levels may be broken. When price rises above resistance levels during a bullish trend, the level turns into a new support level. When price falls below support levels during bearish trend, the level turns into a new resistance level. 
  
• The Relative Strength index is widely used to signal when the market is overbought or oversold. It is displayed as a number from 0 (oversold) to 100 (overbought). Typically, traders pay attention to levels 30 and 70 on the RSI. 
  
• A moving average filters out noise on the price chart by creating a constantly updated average price. It is a lagging indicator that relies on past prices to identify the trend direction of a currency pair, or to find levels of support or resistance. 
  
• A pair of moving averages can also be used to discern price trends. For instance, when a 50-day moving average (shorter lag) crosses above a 200-day moving average (longer lag), a bullish trend is indicated. When it crosses under instead, a bearish trend is indicated.  
  
• A simple moving average is a simple arithmetic average of prices over a timespan. An exponential moving average accords more weight to recent prices over older ones in the time range.  
  
• While fundamental analysis and technical analysis are two very distinct approaches to trading analysis, traders can benefit from both methods. Learning both will provide a trader with a richer foundation to draw upon. 

Module 7: Gold Trading Strategies 

• A variety of trading strategies can be applied to gold trading, and even basic ones can work well. Some of these include buy-and-hold, position trading, and news trading.
  
• The buy-and-hold strategy is viable especially over a long term. This is evident given gold’s strong performance against the world’s top currencies. Since 1971, gold has gained 10.8% on average against nine leading world currencies.
  
• Position trading strategy for gold entails taking a position early when economic indicators point to an emerging price trend. 
  
• Similarly, news trading in gold relies on keeping track of relevant news and developments to spot upcoming trading opportunities. Some of these include central bank buying activity, consumer trends, economic recession or downturns, and gold production levels.
  
• While gold may have a reputation for being a safe-haven asset, market volatility and risk is still present. As such, proper risk management must be instilled when trading gold.
  
• The use of technical tools and indicators can provide traders with a more in-depth view of the gold market. Some popular technical tools are Relative Strength Index (RSI), Moving averages, and Moving Averages Convergence/Divergence (MACD) 

Module 8: Trading Psychology 

• The largest influence behind our trading decisions is our trading psychology. This influence can sometimes be very subtle, which can make it difficult to spot. 
  
• Trading psychology may be thought of as our mental and emotional state while trading. Personality, beliefs, and past experience may also play a part. 
  
• Traders who master their trading psychology are less prone to emotionally driven decisions, and thus have a higher potential to succeed. 
  
• For most traders, the main driving forces between trading psychology is greed and fear, and the interplay between these two emotions. 
  
• Feeling fearful or greedy is natural, but problems can arise when we give in to their influence and make irrational trading decisions. 
  
• Fear can cause us to close positions too early, or even stop us from entering potentially profitable trades, reducing our overall returns. 
  
• Greed can cause us to lose profits by keeping positions open for far too long, or risk losses on positions that are improperly sized. 
  
• The three ways traders can manage trading psychology are sticking to their trading plan; conducting research and gathering knowledge; and staying flexible and constantly honing their skills 

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