How to buy gold in the stock market | Comprehensive guide to gold in the stock market

When an economic catastrophe is likely to occur, the main reason people invest in gold is to protect their capital. According to research, buying gold is the best way to protect capital against the fall of various markets, including the stock market. Therefore, if forecasts and signs point to bad stock market conditions in the future, we can be sure that gold is the best investment.

In this article, we are going to deal with the  methods of buying gold in the commodity exchange .

 

A common misconception among people is that in order to buy gold, one must go to the money changers or goldsmiths in person. Certainly, buying and keeping gold in this way has inevitable risks; If trading in gold on the commodity exchange, the risks of buying and keeping gold are minimized.

There are three ways to buy gold on the stock exchange:

1- Gold coin deposit certificate
2- Gold -backed merchandise boxes
3- Gold bullion from the physical market

Coin Deposit Certificate Transactions

In previous articles, sufficient details have been given about commodity deposit certificate transactions; But in this article, we will deal with coin deposit certificate transactions in more detail.

Coin deposit certificate (so-called warehouse receipt) is a bond whose buyer can receive his coin from the treasury of the relevant bank after purchase and can also keep these bonds in the form of shares and by increasing the price of that symbol, his coin deposit certificate. To sell. Each coin deposit certificate symbol has a due date. The buyer can either pick up the coin after purchasing it or he can keep the bonds until maturity. If the maturity of the coin symbol has expired and the holder of these bonds has not sold his coin deposit certificate, according to the law, the commodity deposit certificate must receive his coins; But usually a new symbol is defined for the coin deposit certificate and this symbol is transferred to the next symbol with a new maturity.

The symbols of the coin deposit certificate currently being traded are as follows:

1- Coins 0012P01 All-Spring Coin 1-Day Delivery 2- Coins 9912P04 Coins All-Spring Delivery 1-
Day Export
3- Coins 9812-03 Coins All-Spring Delivery 1-Day Saman 4- Coins 0011P02 All-Spring Delivery 1-
Day Nation

According to the above, 4 digits on the right means the due date of the coin deposit certificate, C means the continuity of these transactions and two digits on the right means the treasury code (warehouse) have been accepted.

For example, the symbol of coin 0011 P02 means a one-day coin of Bank Mellat, which is traded continuously and its maturity date for Tower 11 (February) is 1400. It is important to note that the Commodity Deposit Certificate market has experienced good growth so far due to its low risk nature and the fact that this market is a suitable tool for two groups of buyers (investors and end users of this commodity).

Gold bullion is also entering the commodity deposit certificate market, which could be an important event for this market.

Note: In order to equalize the price of the symbols of each commodity group of the certificate of deposit, the Commodity Exchange decided to determine one symbol of each commodity group of the certificate of deposit as the most liquid symbol and transactions in the next month based on the final price of that symbol.

Coin Deposit Certificate Trading Time: Gold Coin Deposit Certificate is traded  from Saturday to Wednesday from 13:00 to 15:30.
Minimum purchase:  To purchase a coin deposit certificate, buyers need to purchase at least one coin or 10 shares of the coin deposit certificate.
Trading code required to buy: To  buy a coin deposit certificate, having a stock exchange code is enough.
Price fluctuations: Price  fluctuations are between -5 and +5.

Gold-backed Commodity Fund

A gold fund is a type of commodity exchange traded on a stock exchange that invests in gold certificates of deposit and gold-based securities. The gold-backed fund makes it possible to follow the price return of gold coins, and its investment units can be traded on the Iran Commodity Exchange. The main activity of these investment funds is the gold coin deposit certificate, which is considered as the main asset of the fund; Therefore, the performance of the fund depends on the performance of the gold coin. Although most of the fund's resources will be spent on the purchase of gold coin certificates of deposit, some of the gold fund's resources will be invested in the gold coin derivative market of the Commodity Exchange, including gold coin options. It is noteworthy that the units of these mutual funds do not fluctuate. Investing in these investment funds, in turn, has a lower risk than gold coins and can be invested in them with at least 100,000 Tomans.To buy a commodity fund, customers must obtain a stock code.

Gold bullion in the physical market of the Commodity Exchange

 

Another way to buy gold on the stock exchange is to buy gold bars in the physical market of the commodity exchange. In the article "What is the physical market of the commodity exchange?" The physical market and the mechanism and how to trade in it and how to enter it for suppliers and buyers were mentioned. Gold is considered a subset of the industrial market in the physical market of the commodity exchange. Gold bullion is also traded in the physical market in the Gold Hall.

Gold Hall

One of the physical market halls is the Gold Hall. Gold bullion is a subset of the industrial market and the trading hall of this product is separate. To buy gold in the commodity exchange, you must buy at least 1 kg and at most 5 kg of ingots. All persons who have a commodity exchange code are able to buy gold bullion in the physical commodity exchange market and no special restrictions or licenses are required to conduct these transactions.

To buy gold bullion, we must go through the following:

1- Getting the commodity exchange code:  To get the commodity exchange code, you must first fill in the forms related to obtaining the commodity exchange code in one of the brokerages active in this field.

2- Purchase request to your broker:  In order to buy gold bullion, on the day of the transaction, it is necessary to contact your broker (trader) and register your purchase request. The broker then sends your purchase request to the buyer.

3- Deposit 10% of the transaction value to the proxy account:  Before 12 o'clock, the buyer must deposit 10% of the transaction value to his proxy account so that the broker can block his request and send it to the forum.

4- Buying:  Buying gold in the gold hall has its own mechanism. Since the supplier usually announces the price above the market price, in order to find out the price of gold on the trading day, before the start of the forum, negotiations between the buyer and the supplier for the price of gold are done through brokers on both sides. The subject of this negotiation was to discover the price of gold, which according to the daily announcement of the price of gold through the site  http://www.ajokar.ir The pricing basis is located in the hall. 9% value added will be deducted from the announced price of this site and the parties will agree on the announced price of the site minus 9% value added. In this way, the supplier reduces his rate in the forum. After purchasing, the 10% deposit will be removed from the customer's account before the start of the forum and will be deposited in the broker's account. During the purchase announcement, the broker announces to the client the remaining 90% that the client has three working days to settle. After settling and sending the registration to the supplier, which is done through the brokers, the remittance of receiving gold is sent to the buyer.

Hints:

1- Advocacy account:  To buy from the physical market of the Commodity Exchange, it is necessary to introduce an account from the customer to the broker that is linked to the broker's account. This account is used to deposit 10% of the customer's prepayment for purchases in the physical market.

2- All work steps are done from the time of coding and blocking the customer account and sending it to the forum and buying and negotiating as well as sending the registration to the supplier and receiving the remittance through the broker.

3- Due to the daily announcement of the price of gold and its constant change, in order to buy gold before buying, it is necessary to negotiate between the buyer and the seller in order to reach a single price for the transaction.

4- Trading hours:  Gold Hall starts at 12:30 every day when the offer is made.

5- Minimum and maximum purchase: The  minimum purchase of gold ingots is one kilogram and the maximum is 5 kilograms.

6- Gold sellers:  Three suppliers (sellers) offer gold bars in this market:

Preparation and production of Iranian minerals
in Akhtaran gold mine,
expansion of Zarshuran gold mines and mineral industries

 Some Frequently Asked Questions About Buying and Selling Gold:

1- How can I buy and sell units of gold-backed investment funds or gold coin certificates in the commodity exchange?

For this purpose, it is enough to receive a stock exchange code from your brokerage. Using this stock code, you can trade stocks on the stock exchange, as well as trading units of gold-based investment funds and gold coin certificates.

2- In what days and hours is it possible to trade gold fund and gold coins?

Saturdays to Wednesdays from 12:30 to 15:30 except holidays. 12:30 to 13:00 is the pre-opening stage and at 13:00 the price will be discovered. The online auction (regular trading) is open from 13:00 to 15:30.

3- How much can you buy gold on the stock exchange?

100,000 Tomans is enough to invest in gold-backed investment funds; But if you want to buy a gold coin certificate, you have to pay at least 1 coin.

4- Do you recommend investing in gold-backed mutual funds or a gold coin certificate?

Almost both ways of investing are highly correlated in terms of rate of return, but in highly bullish markets, given that gold-backed mutual fund units do not fluctuate, they can make more profit for their investors. Gold coin certification, on the other hand, experiences lower price declines in highly volatile markets due to its volatile range. Another point is that 100,000 Tomans is enough to invest in gold-backed funds, but to buy a gold coin certificate, you have to pay at least one coin.

5- In what days and hours is it possible to trade  gold bullion in the commodity exchange ?

The date of release of gold bullion in the physical market of the Commodity Exchange is not known; But every day at 4:00 PM, you can check the commodity exchange offerings to see if gold bullion has been offered for the next day. Gold Hall, if offered, starts at 12:30.

The last word

Investing in gold is one of the safest ways to invest and save. Another way to invest is to invest in stocks, which, given the high risk of each country, can be concluded as to what is the most appropriate way to invest. Covering exchange rate risk and taking advantage of changes in global gold prices is another advantage of buying gold, which the commodity exchange has made easier for investors by designing various tools and markets.