Gold Spread Betting Tips

Gold Spread Betting Tips

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FX PUBLICATIONS IS A MEMBER OF NFA AND IS SUBJECT TO NFA'S REGULATORY OVERSIGHT AND EXAMINATIONS. HOWEVER, YOU SHOULD BE AWARE THAT NFA DOES NOT HAVE REGULATORY OVERSIGHT AUTHORITY OVER UNDERLYING OR SPOT VIRTUAL CURRENCY PRODUCTS OR TRANSACTIONS OR VIRTUAL CURRENCY EXCHANGES, CUSTODIANS OR MARKETS.

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Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Once upon a time, trading gold was difficult: you had to buy and sell the metal itself. Then came futures and options, allowing traders to take positions without actually ending up with a safe full of bars, coins or jewelry. Gold exchange-traded funds (ETFs) made it easier still; trading gold was much like trading a stock.
Today, trading gold is almost no different from trading foreign exchange.
If a retail investor uses a spread-betting platform it is simply a matter of buying or selling depending on whether you think that the gold price is likely to rise or fall.
For some people, trading gold is attractive simply because the underlying asset is physical rather than a number in a bank account. There are a variety of strategies for trading gold ranging from studying the fundamental factors affecting supply and demand, studying current positioning of gold traders, to technical analysis and studying the gold price chart .
Even for those who rely principally on the fundamentals, many experienced traders would agree that a better gold trading strategy is incorporating some components of fundamental, sentiment, and technical analysis. A gold trading tip we offer is that fundamental and sentiment analysis can help you spot trends, but a study of the gold price chart and patterns can help you enter and exit specific trades.
Gold has traditionally been seen as a store of value, precisely because it is not subject to the whims of governments and central banks as currencies are. Gold prices are not influenced directly by either fiscal policy or monetary policy and will always be worth something – unlike a currency that can end up being almost worthless because, for example, of rampant inflation.
Gold can also be used by traders as a “safe haven”, along with assets like the Japanese Yen , the Swiss Franc and the notes and bonds issued by the US Treasury. That means that when traders are worried about risk trends they will tend to buy haven assets. On the flip side, traders tend to generally sell haven assets when risk appetite grows, opting instead for stocks and other currencies with a higher interest rate. This makes gold an important hedge against inflation and a valuable asset.
Note, though, that while it is possible to trade the Swiss Franc or the Japanese Yen against a variety of other currencies, gold is almost always traded against the US Dollar . Therefore, trading gold means you will need to take into account the movements of the US Dollar. For example, if the value of the US Dollar is increasing, that could drive the price of gold lower. Keep up to date with the US Dollar and key levels for gold in our gold market data page .
An additional factor to take into account when learning how to trade gold includes market liquidity. The World Gold Council estimates that average daily trading volumes in gold are higher than in any currency pairs other than EURUSD , USDJPY and GBPUSD . That makes it higher, for example, than the daily trading volume in EURJPY , so spreads – the differences between buying and selling prices – are narrow making gold relatively inexpensive to trade.
Lastly, gold trading hours is nearly 24 hours per day. Gold exchanges are open almost all the time, with business moving seamlessly from London and Zurich to New York to Sydney and then to Hong Kong, Shanghai and Tokyo before Europe takes up the baton again. This means liquidity is high around the clock although, as with foreign exchange, it can be relatively quiet after the New York close, with lower volumes and therefore the possibility of volatile price movements.
Technical traders will notice how the market condition of the gold price chart has changed over the years. Gold prices were in a sizeable trend from 2005 to 2015. Since 2015, gold prices have been trading in a defined range, changing hands between $1,000 and $1,400. In our DailyFX courses, we talk about matching your technical gold trading strategy to the market condition. If the market is trending, use a momentum strategy. If the gold chart is range bound, then use a low volatility or range strategy. This is a key ingredient in a gold trading strategy.
For those who prefer to use technical analysis, the simplest way to start is by using previous highs and lows, trendlines and chart patterns. When the gold price is rising, a significant previous high above the current level will be an obvious target, as will an important previous low when the price is falling.
Also in an uptrend, a line on the chart connecting previous highs will act as resistance when above the current level, while a line connecting previous higher lows will act as support – with the reverse true in a falling market. As for chart patterns, those like head-and-shoulders tops and double bottoms are relevant just as they are when trading currency pairs.
For the more sophisticated technical trader, using Elliott Wave analysis , Fibonacci retracement levels , momentum indicators and other techniques can all help determine likely future moves
How to trade a symmetrical triangle pattern on the gold chart
Returning to fundamental analysis, the beginner needs to consider one point in particular: is market sentiment likely to be positive or negative ? If the former, then the gold price is likely to fall and if the latter it is likely to rise. This is therefore the simplest strategy to use when trading gold.
For the more advanced trader, though, it is important to consider too what is likely to happen to the Dollar. In recent years, the Dollar has become increasingly regarded as a safe haven as well, which explains in part why the gold price in Dollars has remained relatively stable. Thus if you think, for example, that the geopolitical situation is going to worsen, you might consider buying gold but at the same time selling, say, the Australian Dollar against its US counterpart.
An advanced trader will also want to keep an eye on the demand for gold jewelry. In India and China in particular, gold jewelry is still seen as an important long-term investment, it has its uses in industry too and central banks’ buying and selling of gold can also be important – all factors that can move the price.
As for supply, advanced traders will want to keep an eye on the output figures from the main producing companies such as Barrick Gold and Newmont Mining.
That said, all the rules of trading forex also apply to trading gold. Retail traders need to be careful not to over-leverage and to think about their risk management, setting targets, and stops in case something goes wrong.
Our principal gold trading tips are therefore:
Whether you are a new or an experienced trader, at DailyFX we have many resources to help you: analytical and educational webinars hosted several times per day, trading guides to help you improve your trading performance. You can learn how to trade like an expert by reading our guide to the Traits of Successful Traders .
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Forex trading involves risk. Losses can exceed deposits. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading.
FX PUBLICATIONS IS A MEMBER OF NFA AND IS SUBJECT TO NFA'S REGULATORY OVERSIGHT AND EXAMINATIONS. HOWEVER, YOU SHOULD BE AWARE THAT NFA DOES NOT HAVE REGULATORY OVERSIGHT AUTHORITY OVER UNDERLYING OR SPOT VIRTUAL CURRENCY PRODUCTS OR TRANSACTIONS OR VIRTUAL CURRENCY EXCHANGES, CUSTODIANS OR MARKETS. FX Publications Inc (dba DailyFX) is registered with the Commodities Futures Trading Commission as a Guaranteed Introducing Broker and is a member of the National Futures Association (ID# 0517400). Registered Address: 19 North Sangamon Street, Chicago, IL 60607. FX Publications Inc is a subsidiary of IG US Holdings, Inc (a company registered in Delaware under number 4456365)

Gold trading spreads: the hidden cost of gold investing

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The price spread is the difference between the price offered to you when you want to buy precious metals and the price bid for your bullion when you want to sell.
Just like in all other markets, you'll find that bid prices for precious metals are always lower than offers. Because buyers want a bargain, while sellers want to get top price.
On BullionVault's Order Board we always show you these two prices so you can see the difference between them – the spread.
That's because the spread represents a cost to you, the investor. And you must take this cost into account to know if you're getting a good deal.
Yet on almost all websites selling gold, silver, platinum and palladium, you are unlikely to see these prices side by side.
Well, we probably wouldn't want to show you sell and buy prices side-by-side either if BullionVault's spreads were 5% or more!
In our busiest market for gold, Zurich, spreads are regularly between 0.10% and 0.20%. That translates to just a few Dollars, Pounds or Euros on 100 grams of gold.
Also note that it's a "market spread" and not a "dealer's spread".
Because on BullionVault – unlike any other physical platform we know of – you can set your own price as you wish, at no extra charge.
So, can all the other thousands of buyers and sellers using our Order Board. And between them, they create a genuine market, with a genuine market spread, rather than pricing gold simply so a dealer can make a profit.
If you take 100 grams of gold this is what the difference in spread could look like:
As you can see from the example above, which for BullionVault includes the 0.5% commission charged when you buy and when you sell, you will pay the most and receive the least back if you buy a 100g gold bar compared with 100g purchased and vaulted using BullionVault.
Please don't take our word for it. Check the prices on any website selling bullion and compare their spreads.
Then compare our live order board prices 24/7. Remember that a round trip, buying and then selling, will also carry a dealing commission of 0.5% each side.
If you are tempted by buying coins or a small bar to keep at home, you should first check your home insurance policy.
That's because you may not be covered if you do not specify the individual high-risk items you own, such as gold coins and bars.
And when you do declare your bullion-at-home to your insurer, you may very likely see your premium increase and even incur an admin fee to add your precious metals to their records.
With BullionVault your gold, silver, platinum and palladium are stored and insured in professional vaults. We charge $4 minimum per month for gold (currently around £3.30) and $8 minimum per month for silver, platinum and palladium (around £6.35 at current exchange rates).
You can see our tariff here and use our cost calculator to estimate your full expenses.
Hand in hand with the peace of mind of storing your bullion at low cost in professional vaults, using BullionVault means you can also sell your precious metals instantly at any time 24/7.
Please Note: This analysis is published to inform your thinking, not lead it. Previous price trends are no guarantee of future performance. Before investing in any asset, you should seek financial advice if unsure about its suitability to your personal circumstances.
Try out buying and selling with a free sample.
Make a bank transfer to your BullionVault account.
In your choice of vault through the live order board.
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Retail gold bar from a popular online retailer
On BullionVault (incl. buy & sell charges of 0.5% each)

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Investors have been left with few safe havens for their cash since the height of the credit-fuelled economic crisis, prompting many to seek out the one traditional store of wealth that has outlasted all previous crises: gold. The severity of this crisis and longevity of the recovery convinced many investors to look for a safe haven beginning a long upward trend for gold prices. More recently, however, gold prices have started to tumble.
Gold is rare and cannot (easily) be faked so it retains its value even though banking systems and paper money are crashing. This is because gold has an intrinsic value which is not contingent on a third party’s performance or mere promise to pay. In fact, there’s a law in economics known as ‘Gresham’s Law’ which states that when there is legal tender currency (as the case with the Dollar), bad money will drive out good money out of circulation. Look at it another way. Should inflation continue rising then your food, fuel and gas are likely to continue moving up in price. So, if you had to visit your gas station and you had the choice to pay with either pure gold coins or US backed paper dollars…with the dollar giving ground while the price of gold remaining stable what would you spend? [obviously you would want to keep the gold!]
Spread Betting on Gold by Christopher Beauchamp of IG Index
Gold positives: scarce (it is thought that the global stock of mined gold is presently around 160,000 tonnes), widespread acceptance of gold as currency, central banks keep hoarding gold reserves (central bank buys increased 16% to a 48-year high of 532 tonnes in 2012), It is particularly advantageous to hold in times of disasters or great economic uncertainty.
Gold negatives: doesn’t provide any income and is not consumed, few industrial applications, lower demand for jewellery and gold bar investments in Europe and India in 2012, increasing mining costs (average cash costs for gold miners amounted to $738 an ounce in 2012). Since gold is considered a non-producing asset it requires an increase in demand to rise in value.
Below you can see an 800 year price-adjusted history for the price of gold. As you can see the price has mainly ranged (excluding short intervals of government intervention) for the best of 500 years demonstrating the value of gold as ‘insurance’.
Gold is a good hedge against inflation – in fact up till about 2002, gold followed the inflation rate.
Demand for gold has surged since year 2000, with much of this demand originating from developing nations using their new-found wealthy to buy into bullion investments. The boom in the gold price is partly as a result of its desirability by a growing middle class in China and especially India (two-thirds of the global demand for gold originates from the the traditional demand for jewellery). China is today the planet’s leading gold producer followed by Australia (which supplied 250.10 tonnes of gold), the United States, Russia and Peru. China’s 2012 estimated output comes in at 413.10 tonnes of precious gold. Its also worth noting that local production in China has risen by about 15 percent a year in stark contrast to global production which in on the decline.
Did you know? Gordon Brown, ex UK chancellor famously (or infamously) sold much of the UK’s gold reserves – a whole 400 tonnes of gold – in 1999 at a price of between $256 and $296 an ounce. It then spiked up, at one point reaching a high of $1,895 in 2011.
The USA can and probably will print more dollars to bail its economy out of the excesses of the property boom and subsequent credit crunch. To some extent, oil producers can pump more oil. It isn’t so easy to find more gold. In fact gold as an asset is unique in that it is not depe
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