Many of us know that gold price does not remain constant and it rapidly changes on a daily basis. You may see the gold price revised everyday based on its demand and supply.

Normal consumers usual see the gold price at the start of the day either on a newspaper or news channel and plan their investment accordingly. However, we would like to mention that very few people who are versed with commodity trading know that the gold price actually changes multiple times a day similar to equities and derivatives.

In this article, we will discuss about usual buying methods. Please read and consider below points for you to earn decent profits in the gold fluctuation.

1) Never miss the chart: It is always recommended to review the gold price for the day before purchasing or selling gold.

2) Choose right merchants: Decide who will you buy the gold from? Usually, gold merchants sell gold by adding a premium and you would actually end up paying extra which will curb your profits.  It is always recommended to purchase gold from authorized brokers.

3) Keep track of events: We should know that gold is traded on dollar value just like crude oil. Hence, it is important to evaluate the dollar value before purchasing or selling gold. If you can anticipate the dollar changes through financial conditions it would be a great advantage to you.

4) There is always a good time to trade: You might be aware that gold prices surge during few seasons and they fall at certain times. Demand and Supply play a major role in the price of the gold and usually the demand increases when there are festivals or marriage events so it is advisable to purchase the gold during damp seasons and resell it when the price increases.

5) You need not hold gold physically to earn profit: One of the best and the foremost way of making profit in gold is through ETF’s (Exchange-traded fund). It operates just like a stock and backs 99.6% of pure gold. It is cash equivalent and easier to purchase or dispose. One ETF unit equals to 1 gram of gold. There many advantages of choosing EFT over physical gold if you are planning to make profits. Some of them are listed below:

  • No hassle of finding genuine brokers, purchasers or sellers.
  • It is considered as long term capital and does not attract wealth tax.
  • It saves you money since there will be no VAT, sales tax, premiums etc.
  • They can also be used as collateral if we need to raise funds using it.

There are one limitation to ETF but is considered minute when you regularly invest and divest in gold. For ETF’s, you should have a Demat account and it may attract nominal fees based on the brokerage firm or financial institution you choose.

We hope you found this article helpful and we wish you good luck for your investments.

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