In Forex Market, prices are lists in pairs. A trader is allowed to sell or buy a currency by checking rates of Forex. If one has to deal in gold, then selling and buying should be at one time.
Another gold quote is “Spot Gold Rate” (USD /XAU), just like Forex quote. Here, the initial symbol is for 1 troy, ounce. So, US$1,000 XAU/USD shows that 1 ounce gold is equivalent to US$1,000 having change in the cost of dollar.
Moreover, the rate of spot gold is called “the ask rate” and the rate for purchasers is called “the bid rate”. The dissimilarity is called “the spread” which is same in Forex market also. But in spot gold, the rates vary rapidly.
An instance of Trading Gold
A trader of spot gold gets a quote which shows spot gold can be put up for sale at the rate US$1,000 and can be purchased at the rate US$1,001. So, 10 ounce of gold having cost of US$1,000 can be purchased at US$10,000. If the rate gets high US$1,000 for one ounce or for US$10,050 for 10 ounce, the dealer can earn US$50. On the same way, if the rate will get decreased, the dealer will have loss of US$50.
It is very easy to know online gold trading. Always keep in mind that this trading has benefits as well as losses. So, the beginners must know all the factors.