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What does physical gold product trading refer to?

2024-01-22

"Physical gold product" trading refers to the process in which buyers and sellers directly trade physical gold, rather than transactions through financial derivatives or virtual gold. This type of transaction usually involves the delivery and transfer of physical gold. The buyer can obtain the actual gold, while the seller needs to sell the gold and obtain cash.

The advantage of trading "physical gold products" is that it is a real physical asset that can be traded anytime and anywhere and is not affected by the fluctuations of financial markets. In addition, since gold is a safe-haven asset, it can protect against inflation and economic risks. However, this transaction method also has its shortcomings. For example, the delivery process is complicated and requires both parties to coordinate time, location, and delivery methods. At the same time, issues such as transportation and insurance need to be considered.




Generally speaking, physical gold product transactions are mainly divided into the following forms:

1. Gold bar trading: Gold bars are a common physical gold product with different shapes and purity. Gold bullion trading is usually carried out in banks or gold shops, and profits can be obtained from the difference between the buying and selling price.

2. Gold ETF: Gold ETF is an exchange-traded fund with gold as the underlying asset. Investors can indirectly hold gold by purchasing gold ETF. The advantage of gold ETFs is that they can be bought and sold at any time and have low management fees.

3. Physical gold bar investment: Physical gold bar investment refers to purchasing gold bars and holding them for a long time, usually for value preservation and hedging. Investors can choose to store gold bars in a bank or keep them themselves. However, they should be aware that storage costs are high and there are security risks.

4. Gold mining stocks: Gold mining stocks refer to the stocks of gold mining companies, and their prices are usually affected by the price of gold. Buying gold mining stocks can indirectly obtain gold income, but you need to pay attention to the risks and management fees of the stock market.


In general, "physical gold product" trading is a relatively stable investment method, but investors need to make choices based on their own risk tolerance and investment goals. At the same time, when trading physical gold products, you need to pay attention to market risks and delivery risks, and choose reliable trading platforms and institutions for transactions.

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