Core Viewpoint - The article discusses the various risks associated with investing in spot gold, highlighting the importance of understanding these risks for potential investors in the volatile gold market [1]. Group 1: Market Risks - Price volatility risk is influenced by global economic conditions, geopolitical events, inflation expectations, and the strength of the US dollar, leading to significant fluctuations in gold prices [3]. - Liquidity risk can arise during extreme market conditions, such as panic selling or economic crises, potentially increasing transaction costs and losses [4]. - Financial risks include the risk of price declines, where short-term drops can lead to capital losses despite gold's long-term value retention [6]. - Leverage risk is present due to the margin system in spot gold trading, which can amplify both gains and losses, potentially leading to significant losses if market movements are unfavorable [8]. Group 2: Mitigation Strategies - To manage market risks, investors should monitor economic data, geopolitical developments, and central bank policies, while diversifying their investment portfolios to reduce the impact of single asset volatility [3]. - For liquidity risk, it is advisable to choose reputable trading platforms and brokers, and to manage funds wisely to avoid excessive leverage [5]. - To address financial risks, investors should control their positions, set stop-loss points based on risk tolerance, and consider dollar-cost averaging to smooth out price fluctuations [7]. - To mitigate leverage risk, it is recommended to use leverage cautiously, typically not exceeding a ratio of 1:10, and to maintain sufficient margin [9]. Group 3: Platform and Policy Risks - Platform risk arises from the potential for fraud or instability in trading platforms that lack proper regulation and credentials [10]. - Policy risk is associated with changes in national policies, such as monetary, tax, and regulatory measures, which can affect gold market supply and demand [12].