A Guide to Gold Trading in Malaysia

Categories: Gold and Commodities Trading  

Tags: Gold Trading Malaysia  gold bullion  online malaysia bullion trading  Bullion Trading Malaysia  

Publish date: 2023-2-3

Along with crude oil, gold is one of the most traded raw resources globally. It is also the most commonly used precious metal because of its economic and cultural significance.

One of the most well-liked types of trading in Malaysia is gold investing. With a FXCM Markets account you can trade all of the precious metals that are part of the commodities market, including gold, silver, and platinum. Gold is available in a variety of forms, including gold bullion, gold coins, and gold stocks on the stock market.

Because of the global financial instability, investing in gold has become a popular investment trend in modern society. At the moment when the gold bullion trading malaysiaprice is soaring, there are also various gold investment products in the market.

Gold trading in Malaysia can be divided into two categories:

1、 Real money trading. Including gold bars, gold coins, gold ornaments and other transactions to hold gold as investment. It is certain that its investment amount is high, and the real rate of return can only be profitable when the gold price rises. However, the difference between the buying and selling prices of gold jewelry in general gold shops is large, so it is not appropriate to buy as an investment. Because gold bars and coins do not involve other additional costs, they are usually the best choice to purchase real money investment. However, it should be noted that holding gold does not generate interest income. The main forms of physical gold in the gold spot market are gold bars and nuggets, as well as gold coins, gold medals and jewelry.

2、 The "gold on paper" transaction is a service provided by banks or brokers without the intervention of real money. The account is based on precious metals. Investors do not need to invest in gold through physical transactions. Since it does not involve the settlement of real money, the transaction cost can be lower; It is worth noting that although it can be equivalent to holding gold, the "gold" in the account can not be exchanged for physical objects in general. If you want to withdraw physical objects, you can only exchange them after making up sufficient funds.

In terms of gold investment products, trust funds are mainly invested in gold products and related industries in Malaysia. Some investment companies also provide overseas gold futures or options investment products. Whether it is trust funds or overseas gold futures and options, such investments face higher risks. Because its investment income does not necessarily depend on the rise and fall of the gold market. It is based on the design characteristics of investment products.

In addition, in the gold market, there is also the lure of promoting participation in gold development and investment to earn high profits, and the commercial means of encouraging investors to actively participate in the investment and even attracting relatives and friends to participate in the investment plan to earn commission. Readers must be vigilant about such investment plans, because such investments belong to the general business operation mode, so they do not need the approval and supervision of regulators such as the Bank Negara Malaysia (Central Bank of Malaysia) and the Securities Commission Malaysia (SC).

The risk is very high, and there is also the potential of Ponzi scheme, so you must think twice before investing!

What gold is worth

Depending on the degree of political, social, and economic unrest, the price of gold may change. Because its price is not always impacted by political actions or driven up by interest rates, trading gold is occasionally referred to as a "safe haven" by traders. Gold, on the other hand, can act as a sort of insurance since investors may reallocate capital into the gold market during difficult periods. Due to speculators trying to utilise gold as a stock hedge, its demand may increase, which might raise gold's value.

In light of this, why do some traders buy gold? The solution has to do with gold hedging. Depending on the current economic stability, gold and other precious metals occasionally have a negative association with equities and bonds. This supports the notion that traders should look to precious metals as a shelter. Some traders choose to gamble on gold trading to offset their possible losses while the value of their share investments is dropping. In the gold market, this is referred to as hedging, and it is a well-liked trading method. The price of gold may rise in response to circumstances that would ordinarily cause the price of equities and bonds to decline, thus traders are aiming to diversify their portfolio by spreading their bets across a variety of marketplaces.

Why not begin trading gold with our demo account? Before diving headfirst into the gold market, you can develop a solid trading technique by practicing with fictitious money.

Investing in gold is very different from investing in business

Basically, we must distinguish between investing in gold and investing in business. Investment in gold is mainly focused on the return of gold appreciation to counter the impact of currency depreciation or inflation. Therefore, we should focus on seeking direct and simple gold investment products. If we invest in the gold industry, as investors, we are no longer faced with the risk of gold appreciation or depreciation, but with other factors. Including the management and operation ability of the management, professional ethics, competitiveness in the general environment, and so on. Therefore, such risks cover a wide range, and any disturbance will affect the final return of investment.

Gold CFDs

The margin requirement for leveraged products like gold CFDs, also known as contracts for differences, is a relatively low percentage of the whole deal value. In contrast to buying gold outright at the spot price, you agree to swap the value difference between opening and closing the position rather than owning the underlying asset (similar to spread betting). Please be aware that there are just as many opportunities for losses as there are for gains when trading gold. Find out more about CFD trading here.

Invest in gold using commodity indices

Spread betting and CFD trading are also available on commodity baskets for all precious metals, including gold, silver, platinum, and palladium. Our commodity index provides exposure to several commodities in a single trade, which is important for diversifying your investment portfolio. In the same situation, you can invest in gold as well as a variety of other precious metals.

Gold and silver, the most important members of the precious metals group, are weighted to account for 70% of the index. 30% of the commodity basket is made up of platinum and palladium. The indices function by following changes in the underlying prices of the commodities; for instance, if gold prices rise inside the index, the index's overall value will rise. Similar to how the overall value of the index will decline if the price of gold decreases.

Trading commodities indices can be an excellent method for investors to learn more about the gold market without putting all of their eggs in one basket. The short-term volatility of gold might be a drawback when trading it. Trading index allows a trader to diversify his bets away from the value of gold and instead place some of his expectations in the rise of the index's total value and price.

How to trade gold online

1) Sign up with a FXCM Markets account. Choose between a live account to get started right away and our demo account to practice with fictitious money.

2) Make a deposit into your account. Since CFDs are leveraged products, you will only need to deposit a small portion of the whole trade value. Profits and losses will depend on your position's total worth.

3) Find out when it's ideal to trade gold. The price and volatility of the commodity market can be impacted by certain political and economic developments. Accordingly, investing in gold carries a risk that could result in significant gains or losses. To stay informed of any changes to the gold market that might have an impact on your trade, check out our news and resources area.

4) Keep an eye on price changes. Utilize our selection of technical indicators to stay up to date on the most recent developments in your online gold trading.

5) Consider your risk-management plan. To incorporate the proper safeguards into your trading plan, refer to our guide to money and risk management. To ensure that all of our clients' losses are kept to a minimum, we always suggest that they think about utilising a stop-loss order.

The Bottom Line

As the general public, we must remember the truth that "there is no free lunch in the world". Before investing, we must pay more attention to research, and never fall into the "herd effect" of chasing gold investment products. The author believes that the gold investment should be regarded as the asset hedging function for long-term financial needs in the financial planning. Never speculate on gold with the speculative mentality of pursuing high profits, or you will lose more than you gain.

[Disclaimer] The articles above are purely personal opinions and are not intended to be investment advice. Only for the purpose of mutual learning and sharing. There is no express or implied warranty regarding the accuracy or completeness of the above-mentioned information. Anyone who relies on the information, ideas, or data contained in this article does so entirely at their own risk.