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Day Trading Gold: Overview, How to Start & Tips

Updated April 28, 2022 CommoditiesGoldGuides

Day trading gold is one way for retail traders to take advantage of opportunities in the financial markets. Here, we look at what day trading gold involves, several gold instruments available, and how to get started on trading them. Also included are some valuable tips and tricks to keep in mind while trading gold.

An Overview of Day Trading Gold: What It Involves

Day trading gold involves buying and selling gold several times in a trading day to take advantage of short-term price movements. [1]

As a day trader, you aren’t interested in owning the gold itself. Instead, you prefer to trade various gold market instruments for trading opportunities. Any benefit or loss you make directly results from your market predictions with gold as your underlying asset.

As a day trader, you depend on volatility in the gold markets to speculate and make short-term trades. Some of these factors include upcoming news and trends.

Ways To Day Trade Gold

There are plenty of ways to access gold in the financial markets. Let’s take a look at some instruments you can access:

1. Gold Contract for Differences (CFDs)

Gold CFDs are a way to trade gold, mainly with limited capital. With CFDs, you can trade gold on margin and enjoy greater exposure from the leverage your broker provides you.

With leverage, you have a double-edged sword. Without a proper strategy, you could lose more than just your capital. On the other hand, you can now enjoy the potential for greater trading opportunities from accurate price predictions.

Here are some quick advantages of gold CFDs:

  • Access to gold markets at a lower cost
  • You don’t own the underlying asset
  • You don’t need to pay the total value of gold before trading the CFD 
  • You can trade gold in both the short-term and long-term
  • Access to leverage 

2. Gold Futures

Gold futures are regulated contracts that oblige you to buy or sell a precise amount of gold at a fixed price on a future date.

Most times, gold futures help gold businesses and traders hedge their positions against loss if prices change against them in the future. Also, as a day trader, gold futures are a brilliant instrument for trading gold today because gold holds intrinsic value, and most investors use it as a strategy to beat inflation.

Like CFD markets, futures markets have high liquidity, which means you can maximise any opportunity from almost any market setting.

3. Gold ETFs

Gold ETFs are derivatives that hold several assets in a single basket. Unlike most trading tools, ETFs diversify your risk of losing everything at once.

Buying a gold ETF allows you to participate in the gold markets without owning the actual precious metal.

4. Gold Trading in Forex (XAU/USD)

Gold trading in forex is a standard that measures the price of an ounce of gold against the US dollar. Gold FX gives you exposure to gold through the forex market. Since changes in USD values affect the value of gold, trading gold in forex is a great way to lower your risk during market crashes.

Volatility, supply and demand, and liquidity are factors to consider before trading gold in forex.

Click here to read more about gold trading tips.

5. Gold Bullion 

Gold bullion is physical gold kept in bars, coins, or ingots. Bullion can serve as legal tender or a store of value by governments and other institutions. As an investor, you can own bullion through brokers that operate in the bullion markets.

As a physical asset, most investors see bullions as a perfect store of value.[2]

6. Gold Certificates

Gold certificates are paper notes that equate the dollar value of the quantity of gold you hold in the National US Treasury reserves. The significant difference between gold certificates and other trading tools is that you own gold as the asset.

The disadvantage of gold certificates is that they can go from valuable to worthless fast, depending on the company’s financial status. For instance, If your broker company goes bankrupt, any gold certificates they issued automatically become worthless.

What Makes Gold Move?

Several factors affect the gold markets and how prices move:

1. Inflation

Because of its inverse relationship with the US dollar, inflation usually drives up gold prices. Also, an increase in demand for gold will drive up its prices, regardless of bull or bear markets [3].

2. Supply

Even though more gold comes into the market through mining, it doesn’t cause gold prices to plummet. Most times, other users take it and use it as a store of value. That means its supply reduces, and prices remain high.

3. Central Banks

Central banks are some of the largest buyers of gold. When the markets boom, they’ll still buy more gold, keeping the markets stable and causing gold prices to fall.

How To Start Day Trading Gold

You can get started day trading gold in a few simple steps. Here’s how to go about that:

1. Open Your Trading Account

To start day trading gold, open a trading account with a broker. Your broker will ask for a copy of your ID and proof of address to verify your account. Once approved, you gain instant access to the markets, including instruments like Gold CFDs, ETFs, and Futures that you can trade immediately.

Before placing your first trade, add funds to your trading account by connecting it to your bank account, credit, or debit card.

2. Develop a Trading Strategy

You can enter and exit markets with a gold trading strategy while efficiently managing your capital. Strategies help you take advantage of market opportunities while reducing your risk of losses. 

3. Choose A Gold Instrument to Trade

According to your trading strategy, pick a gold instrument to trade. It could be Gold CFDs, Futures, Options, or Gold FX. According to your risk management strategies, you can trade as many markets as you want and get into as many positions as you’d like.

The only markets unavailable this way would be gold bullion and certificates. Besides these, all other gold instruments are available without actual ownership of the precious metal.

4. Open Your First Position

Open your first gold position in your chosen market from your brokerage account. Depending on prevailing market conditions and your strategy, you can go long or short. You can place stop losses and take profit orders to manage your capital efficiently.

5. Monitor And Close Your First Position

You can now monitor all your open gold positions throughout your trading day across weeks or months. To do so, log in to your trading account and monitor the performance of your portfolio. You can also watch it via email, SMS, and app alerts.

Once you’ve made an accurate prediction, close your open position and take your profits, even though this can work vice versa and cause losses if the market moves against you. Your broker will take out any fees or charges directly from your earnings.

Tips and Tricks for Day Trading Gold

Here are some top tips and tricks that can help you day trade gold: 

1. Open a Demo Account.

Most brokers provide you with a demo account to train yourself and learn market strategies that work. Demo accounts prepare you to trade with real money. Also, they allow you to master indicators and all other technical tools and resources.[4]

2. Blogs & Newsletters 

Learn new things and read helpful notes on newsletters and blogs. You can also join day trading discussion forums where experts give their views and suggestions on better ways to trade gold.

3. Academic 

As a new trader, you can also learn how to trade from many online courses and trading workshops. You can also download articles and tutorials from skillful traders to learn more from their personal and professional experiences.

4. Government Treasury Actions 

The US National Treasury plays a crucial role in determining the movement of gold prices. They also set bank rates that determine the pricing of the gold in the market.

5. Current News Updates

Day traders in gold markets keep in touch with the latest news which can maximise the small opportunities in price movements in gold prices or demand. 


Armed with the knowledge and tips from this article, you are now better prepared to start trading gold CFDs. You can start by opening a demo or live account from Vantage today.


  1.  “Day Trader Definition.” Accessed 8 Apr. 2022.
  2.  “Learn to Trade Forex With A Demo Account – BabyPips.” Accessed 8 Apr. 2022.
  3.  “7 Common Factors That Influence Gold Prices | The Motley Fool.” 13 Oct. 2016, Accessed 8 Apr. 2022.
  4.  “Learn to Trade Forex With A Demo Account – BabyPips.” Accessed 8 Apr. 2022.

Vantage does not represent or warrant that the material provided here is accurate, current, or complete, and therefore should not be relied upon as such. The information provided here, whether from a third party or not, is not to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any financial instruments; or to participate in any specific trading strategy. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. We advise any readers of this content to seek their own advice. Past performance is not an indication of future results whereas reference to examples and/or charts is solely made for illustration and/or educational purposes. Without the approval of Vantage, reproduction or redistribution of this information is not permitted.

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