FinTech

How to Invest in Gold Online and be Profitable

Invest in Gold Online

Gold is renowned as being the most effective and popular safe haven asset in the global financial marketplace, with investors typically flocking to this instrument during times of economic tumult.

This was borne out during the global coronavirus pandemic, when the price of gold continued to increase incrementally through August as economies throughout the world locked down their societies.

But what underpins this growth, and should you look to invest in gold through 2021 and beyond?

The Rising Price of Gold and its Performance in 2021

As we’ve already touched on, the price of gold peaked on August 4th last year, breaking out above the $2,000 mark ($2,036.58) as countries began to formally emerge from the initial lockdown.

This followed a surge of demand for the precious metal, as investors sought out gold as a viable and secure store of wealth that can sustain their portfolios during times of economic uncertainty or hardship.

Even though various other peaks and troughs were observed throughout the year as various Covid-19 outbreaks were reported globally, the price of gold largely hovered around the $1,857.50 mark. 

Conversely, we saw the value of gold fluctuating between the $1,300.00 and $1,400.00 range from July 2016 to June 2019, before incremental growth saw the price increase throughout the remainder of the year and prior to the coronavirus pandemic in March 2020.

It’s through this lens that we should consider the recent volatility in the gold price, which sunk back to $1,710.55 on February 22nd before rebounding to an eight-month high of $1,898,94 on May 23rd.

The current value of gold is $1,778.16, which is markedly higher than the five-year average and indicative of an asset that remains in high demand as 2020 continues.

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Will This be Sustained and How Can You Invest in Gold?

While the price of gold retains a little more scope to grow, Senior Oanda Analyst Jeffrey Halley believes that it will struggle to maintain gains above $1,900 (at least until the US inflation data is out of the way).

In fact, the asset is likely to remain in choppy waters through Q3, bouncing between $1,860 and $1,900 with last week’s high of $1,917.00 expected not to be retested for the foreseeable future.

Still, there’s plenty of reason to invest in gold given the current economic uncertainty, especially when you consider the various vehicles for investing in this asset in the digital age.

For example, you can trade XAUD online (which is the spot price for gold in US dollars) through a contract-for-difference (CFD), which enables you to speculate on the asset’s future price performance and potentially profit even as it begins to decline as it approaches the $1,900 mark.

Ultimately, this allows you to trade gold without assuming ownership of the underlying instrument, which allows for far greater flexibility and is arguably ideal in an uncertain economic climate where the future path to growth remains unclear. 

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