A Review of Spread Betting on Gold Spot and Futures Markets

Spread Betting
Also see Live Gold chart below.

Gold Spread Betting

The Gold spread betting guide:





Where Can I Spread Bet on Gold?




Investors can spread bet on gold and numerous other markets by using an account with any of these companies:

Gold

Financial Spreads ETX Capital Spreadex IG Index City Index
Gold Daily Financial Spreads Gold Daily ETX Capital Gold Daily Spreadex Gold Daily IG Index Gold Daily City Index Gold Daily
Gold Future Financial Spreads Gold Future ETX Capital Gold Future Spreadex Gold Future IG Index Gold Future City Index Gold Future
The above spread betting markets may also be available with other companies. Also see Comparison Table Notes.



Live Gold Chart







Where Can I Get Live Spread Betting Prices and Charts for Gold?



The quick chart above gives a handy look at how the market is performing.

But, for investors that are trading gold, the providers mentioned above offer real-time prices as well as charts with more advanced options.

Typical gold chart

Example candlestick chart



About Gold




When it comes to spread betting, gold is the most traded metal and one of the most traded commodities.

Historically, gold has been seen as a lower risk investment because the precious metal is thought to hold its value, even during uncertain economic times. In fact, gold was used for many years as the main base currency when trading other commodities for precisely this reason.

Many traders prefer to take money out of what are typically thought to be riskier markets, such as forex pairs or equities, and re-invest in gold when markets are more volatile.

Even in times of relative stability, gold trading continues to play a significant role in many portfolios and this may often take the form of a spread bet.

Spread betting can be a useful tool for an investor who is considering trading on gold. It allows tax free*, leveraged trades. You can also take a long or a short position, ie speculate on the price of gold to go up or down. However, whilst the leverage can allow for larger profits, it can also lead to losses in excess of your initial stake size. Gold spread betting should only be attempted after proper research and, where necessary, an investor should seek professional advice.

Despite the historical viewpoint there are still differing opinions on gold:
  • Gold is considered to be a long-term hedge against inflation. That has been empirically justified by research conducted by the World Gold Council in June 2006.

  • Simon Denham of Capital Spreads is not a fan, “In the end Gold is just a pretty, useless, yellow lump of metal. Too valuable to actually use for anything and costly to own. In times of trouble it has safe haven value but in good (or even just slightly bad) times, it is of little worth as a long term investment”.

Whatever your point of view, gold can be an interesting market to trade and it sees some impressive price movements
  • In 2007 it started trading around $605 before ending the year at $898 per ounce.

  • In March 2008, the precious metal traded as high as $1028. Later in the year Gold was seen down at $681.

  • In February 2009, Gold again broke through the $1,000 mark to trade as high as $1,006 per ounce. The metal then dropped to $864 in April 2009.

  • In 2009, on a given day, the price of gold can easily swing by $10-20.

  • In February 2010 the gold spread betting market fell to a low of $1,043. Nevertheless by October 2010 gold prices were at new record highs and in excess of $1,300.

  • In August 2011 gold hit $1,921 level. Since then the market has been highly volatile. In September 2011, the market swung between highs of $1,862 and lows of $1,532.

  • Since 2011, gold has been on a slippery slope. In 2012, the metal traded as high as $1,802.7 but was also seen as low as $1,526.5.

  • 2013 was another poor year for the metal, it opened at $1,681.5 but closed the year at $1,204.3.

  • There’s been a little more stability in 2014, with $1,240 acting as support.

    Nevertheless, despite a lot of geopolitical turmoil, there’s been little short-term risk of inflation and so the metal has been unable to break above $1,388.

    We are now back to trading down at the levels of 2010.



Gold Spread Betting

Gold Spread Betting Example (Daily Market)



If you're interested in financial spread betting on a commodity like gold then, looking at a platform like CapitalSpreads, at the moment you would find a price of $1,292.6 - $1,293.0.

Therefore, you could speculate on gold to move above $1,293.0 or move below $1,292.6.

When placing a spread bet, you speculate on every unit the market moves up or down. In this case, with the gold market a unit is $0.1 of the precious metal's price movement.

As an example, let's say you want to stake £2 for every $0.1 gold rises or falls.


Spread Betting on the Market to Go Up



If you went long of gold at $1,293.0 and the precious metal increased then the price could move to $1,300.8 - $1,301.2. Assuming this was the case, you might decide to close your position at $1,300.8.

Your Profits (or Losses) = (settlement price of the market - opening price of the market) x stake per $0.1
Your Profits (or Losses) = ($1,300.8 - $1,293.0) x £2 per $0.1 stake
Your Profits (or Losses) = $7.8 x £2 per $0.1
Your Profits (or Losses) = £156 profit

Conversely, if the precious metal were to fall to $1,285.9 - $1,286.3, you may want to close your position to limit your losses. In that case, you'd sell back at $1,285.9.

You would do this with the same £2 per $0.1 stake:

Your Profits (or Losses) = (settlement price of the market - opening price of the market) x stake per $0.1
Your Profits (or Losses) = ($1,285.9 - $1,293.0) x £2 per $0.1 stake
Your Profits (or Losses) = -$7.1 x £2 per $0.1
Your Profits (or Losses) = -£142 loss


Spread Betting on the Market to Go Down



A useful feature of financial spread betting is that you can short sell the markets.

This market was originally priced at $1,292.6 - $1,293.0.

If you were to sell gold at $1,292.6 and the precious metal decreased then the quote might change to $1,285.3 - $1,285.7. If that happened, you could close your trade for a profit at $1,285.7.

Your Profits (or Losses) = (opening price of the market - settlement price of the market) x stake per $0.1
Your Profits (or Losses) = ($1,292.6 - $1,285.7) x £2 per $0.1 stake
Your Profits (or Losses) = $6.9 x £2 per $0.1
Your Profits (or Losses) = £138 profit

Markets can also rise, if the precious metal increased to $1,298.5 - $1,298.9, you could close your bet to restrict your losses. If this were the case, you would buy at $1,298.9.

So, with the same £2 per $0.1 stake:

Your Profits (or Losses) = (opening price of the market - settlement price of the market) x stake per $0.1
Your Profits (or Losses) = ($1,292.6 - $1,298.9) x £2 per $0.1 stake
Your Profits (or Losses) = -$6.3 x £2 per $0.1
Your Profits (or Losses) = -£126 loss

  • Gold Rolling Daily market taken as of 25-Jul-14.
  • Be aware that this is a rolling daily spread bet. This type of market does not have a fixed closing date and instead rolls over to the next session automatically. If it does roll, then you may receive a small credit or incur a small financing cost. For more information, please see rolling daily spread trading.
  • For ‘futures’ example see, how to spread bet on gold futures.



Advert Financial Spreads Spread Betting - No Fees, No Commissions, Free Charts and Live Prices.
Spread Bet on Indices, Forex, Commodities, Shares and more. For details see Financial Spreads.



Gold Demo Accounts



The companies listed below also offer test accounts. I.e. accounts where you can have a go at spread betting on gold without putting your funds at risk.

Financial Spreads   > Financial Spreads

InterTrader   > InterTrader



User Questions and Answers on Gold



comments powered by Disqus

'Gold Spread Betting' last update by James White, 20-Feb-2017





Similar articles:

Commodities Spread Betting - last update: 20-Feb-2017
A comprehensive commodities spread betting guide with live charts and prices for energies, metals and agricultural futures. Plus how and where to trade commodity markets, the influence of supply and...read more.

Crude Oil Spread Betting - last update: 20-Feb-2017
The complete guide to crude oil spread betting with live charts and prices, how & where to trade both US and Brent oil futures, important 'energies' trading facts and...read more.

Silver Spread Betting Guide - last update: 20-Feb-2017
In our silver spread betting guide we have live silver charts & prices, fully worked precious metal trading examples, user comments and...read more.

Copper Spread Betting Guide - last update: 20-Feb-2017
In our copper spread betting guide we have live copper charts & prices, fully worked metals trading examples, user comments and...read more.

Natural Gas Spread Betting Guide - last update: 20-Feb-2017
In our natural gas spread betting guide we have a live natural gas charts & prices, fully worked energies market trading example, user comments and...read more.

Coffee Spread Betting Guide - last update: 20-Feb-2017
In our coffee spread betting guide we have a live coffee chart & prices, fully worked trading example for the soft commodity, user comments and...read more.



This page: 'Gold Spread Betting'
The complete guide to gold spread betting with live charts and prices, how & where to trade gold, a look at volatility in precious metals as well as...go to top.



Financial Spread Betting Emails
Free Financial Email: Latest Spread Betting Offers and where to find narrow spreads. Click here to sign up.


Home
Live Charts
Spread Betting Firms
City Index
ETX Capital
Financial Spreads
IG
Spread Betting Tips
Spread Bet Emails
Index Spread Bets
FTSE 100 Spread Bets
Dow Jones Spread Bets
DAX 30 Spread Bets
Forex Spread Bets
EUR/USD Spread Bets
EUR/GBP Spread Bets
GBP/USD Spread Bets
Shares Spread Bets
Commodity Spread Bets
Crude Oil Spread Bets
Gold Spread Bets
All rights reserved. © Copyright SpreadBets.org.uk 2007-2017.