Trade Gold (XAU/USD)
Trade Gold (XAU/USD) News
What is gold (XAU/USD)?
Gold is one of the oldest and most widely traded precious metals in the world. On financial markets, gold is quoted under the ticker XAU/USD, priced in US dollars per troy ounce. It is physically traded via the London Bullion Market Association (LBMA), and as futures contracts on the COMEX division of the New York Mercantile Exchange and the Shanghai Gold Exchange (SGE).
Demand for gold comes from multiple sectors. The jewellery industry accounts for roughly 50% of annual demand, followed by investment demand (coins, bars, ETFs), central bank purchases, and industrial applications in electronics. Central banks worldwide hold gold as a strategic reserve alongside their currency holdings. In recent years, China, India, Turkey, and Poland have significantly expanded their gold reserves.
With annual global production of approximately 3,500 tonnes, the largest gold-producing countries are China, Australia, Russia, Canada and the United States. At Libertex, you can trade gold as a CFD on XAU/USD, allowing you to take positions on both rising and falling prices without physically owning the metal.
What influences the gold price?
Gold occupies a unique position in financial markets: it behaves both as a commodity and as a financial asset. As a result, gold prices respond to a broader range of factors than most other metals.
Inflation and real interest rates. Gold has historically been regarded as a hedge against inflation. When inflation rises and real interest rates (nominal rates minus inflation) decline, gold becomes more attractive because it does not generate interest or dividends. Negative real interest rates are typically particularly supportive of the gold price.
Central bank monetary policy. Decisions by the Federal Reserve and other major central banks have a direct impact on gold. Rate cuts and accommodative monetary policy make gold relatively more attractive compared to interest-bearing investments. In addition, gold purchases by central banks themselves influence demand. In recent years, central banks have bought record amounts of gold to diversify their reserves.
The US dollar. Gold and the USD historically exhibit an inverse correlation. When the dollar weakens, gold becomes cheaper for holders of other currencies, stimulating demand. A stronger dollar typically has the opposite effect.
Geopolitical uncertainty. During periods of geopolitical tension, such as armed conflicts, trade wars and other forms of political instability, investors seek shelter in gold as a stable asset. This flight to safety can drive the price significantly higher in a short period.
Supply and demand. Global gold production grows only marginally, while demand from jewellery, industry, and investment gradually increases. Declining ore grades at existing mines make new production more expensive, placing a supportive floor under the price.
Speculation and market sentiment. Gold attracts significant speculative trading volumes. Positioning in futures and ETFs, technical analysis, and market sentiment can generate considerable short-term volatility.
Historical highs and lows of gold
The gold price has gone through several notable cycles over the past decades. In September 2011, gold reached a then-record of approximately $1,920 per troy ounce, driven by the European debt crisis and the aftermath of the 2008 financial crisis. A multi-year decline followed, with gold hitting a low of around $1,050 in December 2015.
The COVID-19 pandemic drove the price to a new record of $2,075 per ounce in August 2020, fuelled by massive monetary easing and economic uncertainty. From 2024, the rally accelerated further thanks to persistent geopolitical tensions, record central bank purchases, and expectations of Fed rate cuts. Throughout 2024–2025, gold repeatedly broke through historic levels, climbing past the $2,700–2,800 zone.
Frequently asked questions about gold trading
What influences the gold price?
The gold price is influenced by inflation and real interest rates, monetary policy from central banks (particularly the Federal Reserve), the US dollar exchange rate, geopolitical tensions, physical demand from the jewellery and electronics industries, and gold purchases by central banks. The interplay between these factors makes gold one of the most dynamic markets.
How can I trade gold on Libertex?
On Libertex, you can trade gold via CFDs on the XAU/USD instrument. You speculate on price movements without physically owning the metal. You can take both long (buy) and short (sell) positions. Open an account, make a deposit, and select gold from the instrument list. You can also practise first with a demo account.
What are the trading hours for gold?
Gold is traded nearly 24 hours a day globally via the LBMA in London, COMEX in New York, and the SGE in Shanghai. The most active trading periods are the European and American sessions. Exact trading hours on the Libertex platform may vary, so check the instrument specifications on the platform for current times.
Why do central banks buy gold?
Central banks hold gold to diversify their reserves and reduce dependence on any single currency, such as the US dollar. Gold retains its value over the long term and is not subject to counterparty credit risk. In recent years, central banks in emerging markets, in particular, have significantly increased their gold purchases.
What is the difference between gold CFDs and physical gold?
With a gold CFD, you speculate on gold's price movement without actually owning the metal. This offers advantages such as the ability to go both long and short, use leverage, and trade without storage costs. Physical gold (bars, coins) provides direct ownership but involves storage and insurance costs, and can only be profitable when the price rises.
Is gold a good investment?
Gold can contribute to portfolio diversification due to its historically low correlation with stocks and bonds. It is often viewed as a hedge against inflation and economic uncertainty. As with any investment, however, there are risks as gold's price can fluctuate significantly in the short term. It is important to conduct your own research and only trade with money you can afford to lose.