Spread Betting on Gold
Where to Spread Bet on Gold
You can spread bet on Gold with the following companies:
Commodities spread betting may also be available with other companies - notes.
|Gold (spread size)
|Commodities (min stake)
|Commodities (more available)
Gold Spread Betting - Market Review
Spread Betting on Gold - 22 May 2013
The ongoing rally in equities delivered a renewed blow for gold investors that were hopeful of seeing a meaningful rebound.
With so much pushing and pulling over the asset purchasing program, investors decided to discard the precious metal once again, with the market dropping $18.4 to $1,374.8.
Spread Betting on Gold - 21 May 2013
In commodities spread betting, gold closed around $40 higher at $1,393.4 yesterday, but is dropping off this morning due to a stronger dollar and continued outflows from exchange-traded products.
The precious metal has dropped by around 20% so far this year in light of an improving global economy and record highs in the equity markets.
This has caused a lot of investors to shift their portfolios so they can take a slice of these higher-yielding opportunities.
We are also seeing falling physical demand and many are expecting the Fed to stop its monetary easing measures which could add downward pressure to the price.
It seems that the only glimmer of hope in the near-term is for the Fed to maintain its current stance.
Spread Betting on Gold - 20 May 2013
Gold closed at $1,354.6 in the last session and is down by around 13% for the first quarter due to a large sell-off in exchange traded products.
This has outweighed demand from bargain hunters in Asia and China that have been locked in a tug-of-war battle with the bears.
This morning, the metal is heading south for an eighth straight session, to its weakest level in a month, on fears that the Fed will reduce their monetary stimulus measures.
This would dent gold's appeal as a hedge against inflation which such easing measures have been known to stoke.
With equity markets hitting record highs, the temptation for investors to be a part of the wave has caused them to dump gold in favour of riskier opportunities.
Having said that, many would argue that buying into the gold market at this point could be riskier still.
Spread Betting on Gold - 17 May 2013
News that billionaire George Soros had reduced his gold holdings in exchange-traded products piled on the misery for gold investors yesterday.
The precious metal will not have been helped by the strengthening dollar and we are currently trading at the $1,380 level for the June futures contract.
Spread Betting on Gold - 16 May 2013
Gold investors seem to keep taking a battering, with yesterday providing the latest punch.
Gold futures for June delivery ended 2% lower at $1,396, the lowest level for almost a month.
Low inflation numbers from the US and the continuing strength in the dollar provided the main stimulus for the move.
Spread Betting on Gold - 15 May 2013
Gold inevitably suffered on what was a 'risk-on' day for spread betting markets. The precious metal fell for its fourth consecutive session on Tuesday, settling at $1,424.
The gold-buying season in India is likely to provide some near-term support in what otherwise looks to be a fairly bleak outlook.
Spread Betting on Gold - 14 May 2013
Gold continues to struggle and the start of this week saw another move to the downside.
As risk-averse investors, who had previously turned to gold as a safe haven and inflationary hedge, continue to seek riskier assets, the price of gold will continue to fall.
Despite this, the precious metal is seeing some temporary respite this morning against the weaker dollar.
Spread Betting on Gold - 13 May 2013
Gold had a tough time on Friday, falling by around $35 at one point before rebounding somewhat to close at $1,442.
The strength of the dollar is partly responsible for the declines as it makes the commodity more expensive for foreign investors.
Spread Betting on Gold - 10 May 2013
In commodities trading, the relatively large appreciation in the dollar was the main driver for the gold price.
This, combined with the positive US employment data, resulted in a 1% fall for the precious metal.
Spread Betting on Gold - 09 May 2013
Gold futures had a good day on Wednesday as the contract for June delivery closed $25 higher at $1,475, its highest level for almost a month.
The sharp fall of the dollar supported the rise as well as hopes of surging demand from China in the coming months.
Spread Betting on Gold - 08 May 2013
Gold continued to fall on Tuesday as investors turned their attention and resources to equities in search of better returns.
Ultimately, the precious metal closed $20 lower at $1,450.
Spread Betting on Gold - 03 May 2013
Gold prices gained $9.9 to $1,467 yesterday, boosted by signs that global monetary policy could get even looser.
This came despite a stronger US currency, which could indicate demand for asset preservation when fiat currencies disappoint market participants.
Spread Betting on Gold - 02 May 2013
Gold investors seemingly focused less on the Fed reiterating its current stance and more on the promises of a reduction in monetary policy should the inflation outlook change.
This caused the precious metal to resume its slump, with the market losing $18.1 to $1,457.9, after recouping more than half of the now famous two day record nosedive.
Spread Betting on Gold - 01 May 2013
Despite anticipation of further monetary easing on both sides of the Atlantic, gold prices ended rather flat yesterday, trading in a tight daily range around the $1,476.5 level.
This may imply that the dovish news is already priced in, with investors on standby for more developments before committing further capital.
Spread Betting on Gold - 30 April 2013
With fear of inflation nowhere in sight, it was left to expectations of further monetary stimulus to reignite demand for gold as an alternative asset.
As a result, the precious metal managed to climb $10.2 to $1,476.4, with additional support being provided by ongoing news of a pickup in Asian demand for jewellery.
Spread Betting on Gold - 29 April 2013
Bad news on the economic front put downside pressure on the whole commodities spectrum on Friday, it also pushed inflation fears a little further away.
That sent gold $10.1 down to $1456.9 after the metal failed to make a determined attempt to cross above the $1500.00 mark.
Spread Betting on Gold - 26 April 2013
During an eight day struggle, gold has managed to recoup roughly half of mid-April's violent sell off.
Yesterday's $37.2 rally to $1,467.8, was the result of rising demand for the physical metal, including bars, coins and jewellery, coupled with ongoing bargain hunting.
However, it's probably too early to suggest that we are seeing a shift back to the times when gold was everyone's darling.
Spread Betting on Gold - 25 April 2013
Resuming its upside trend, gold surged $18 to $1,431 yesterday after suffering from the worst sell off for three decades in just two days.
Along with heightened expectations that the ECB is considering another set of easing measures, there were also reports of rising physical demand from central banks in Russia and Kazakhstan.
Spread Betting on Gold - 24 April 2013
We saw a $12.5 drop in gold yesterday to $1,413.1, snapping a five day rally on renewed confidence in the US economic recovery.
Meanwhile, the gold spread betting market is still feeling downside pressure from expectations of plunging demand for industrial metals after China reported a slowdown in its economic growth.
Spread Betting on Gold - 23 April 2013
Gold continued its rebound yesterday, with the market gaining $17.7 to $1,426.2, on reports of renewed demand for coins, bars and jewellery.
After suffering from such a violent decline, the largest in the last few decades, it was always likely that a few bargain hunters would be enticed back in.
This is especially true given that the Japanese have promised QE on a massive scale to get rid of their crippling deflation.
Spread Betting on Gold - 22 April 2013
After last Monday's massive plunge, gold buyers made a cautious comeback for the rest of the week.
The precious metal managed to cross back above the $1,400 level on Friday and, encouragingly, it remained there posting a $6.2 gain for the day.
Nonetheless, it's too early to say whether a renewed slump is on the cards or whether the price is now attractive enough for longer-term investors.
Spread betting and CFD trading carry a high level of risk and you can lose more than your initial deposit so you should ensure spread betting or CFD trading meet your investment objectives and if necessary seek independent advice.
Market Commentry from Financial Spreads.
Financial Spreads - tax free* trading on over 2,500 spread betting markets. With a Financial Spreads Account you can trade commission free, 24 hours a day on stock market indices, forex, shares commodities and...read review » Financial Spreads.
Introduction to Gold Spread Betting
When it comes to financial 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 yellow metal is thought to hold its value, even during uncertain economic times. In fact, for a long time, Gold was used as the main base currency when trading other commodities for this exact reason.
When markets are looking more volatile many investors prefer to take their money out of what are typically thought to be riskier markets, such as forex and equities, and re-invest in Gold.
Even in relatively stable times, Gold trading continues to play a significant role in many portfolios.
Financial 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 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 investment. If you are looking to spread bet on Gold you should only do so after comprehensive research. Where necessary you should seek professional advice.
Looking at the supply of Gold, note that mine production, which has historically accounted for 60% of the world’s Gold has consistently fallen since 2001. Having said that, due to new mines, China has been able to increase its output of the metal.
Despite the historical viewpoint there are still contradictory opinions on Gold:
Whatever your point of view is on the metal, Gold can be an interesting market to trade and it sees some impressive price movements:
- Gold is considered to be a long-term hedge against inflation. That has been empirically justified by research from the World Gold Council in June 2006.
- Simon Denham of Capital Spreads however 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 in just-slightly-bad times, it is of little worth as a long term investment".
- During 2007 it started trading around $605 per troy ounce before ending the year at $898
- In March 2008, the yellow metal traded as high as $1,028. At other points in the year, Gold was seen as low as $681
- During February 2009, Gold again broke through the $1,000 mark to trade up to $1,006 per ounce. The metal then dropped back to $864 in April 2009
- Throughout 2009 and 2010, on a given day, the price of Gold could easily swing by $10-20
- In February 2010 the metal traded as low as $1,043. However by October 2010 prices were at record highs in excess of $1,300
- In August 2011 gold breached the $1,900 level
- In December 2012 it was more likely to be found hovering back at the $1,700 level
How to Spread Bet on Gold
Let's say you want to financial spread bet on Gold, so you look at a spread betting website, e.g. InterTrader, and see the real-time market price of:
Here's what you can expect from a trade.
| The Market: || Gold Rolling Daily|
| The Spread: ||$1,801.3 - $1,801.7|
| How the Spread Works: ||You can trade on the Gold Rolling Daily market to go:
Above $1,801.7, or
This is a Rolling Daily spread bet and so there is no expiry date for this trade. If you haven't closed your position and the session ends then your position will roll over into the next session.
If a trade is rolled over then you will either be credited or debited for overnight financing based on whether you are betting on the market to go up or down.
For more details also see Rolling Spread Betting.
|Points Traded:|| Trades on the Gold market are priced in £x per $0.1.
Where $0.1 is 10¢ of the commodity's price movement.
E.g. if Gold moves $4.00 then you would lose or gain 40 times your stake.
|Stake:|| You work out how much you want to stake per $0.1, e.g. £2 per $0.1, £3 per $0.1, £5 per $0.1, £10 per $0.1 etc. |
|Short Staking Exercise:|| For example, if you have a stake of £2 per $0.1 and Gold moves by $2.60, you would win/lose £2 per $0.1 x $2.60 = £52. |
Spread Betting Example | Buying Gold
Online spread betting on the commodity to increase
|You Now Decide to Buy or Sell:
Above $1,801.7? or
|You Might Choose to Go Long: ||
|You Choose Your Stake Size, Let's Assume You Choose: ||£1 per $0.1 |
|So What Next? ||
- You will make a profit of £1 for every $0.1 Gold moves higher than $1,801.7
- Your will make a loss of £1 for each $0.1 Gold moves lower than $1,801.7
|When Speculating on a Market to Go Up Your Trading P&L = ||(Closing Price - Opening Price) x stake per $0.1 |
|Example 1 ||Gold rises and the gold spread betting market is moved to $1,812.5 - $1,812.9. |
|Close and Take a Profit? ||At this point, you could opt to keep your position open or close it to lock in a profit. In this case you opt to take your profit. Therefore, you close your spread bet by selling at $1,812.5.|
|Your Trading P&L = ||(Closing Price - Opening Price) x stake per $0.1|
| ||($1,812.5 - $1,801.7) x £1 per $0.1|
| ||$10.8 x £1 per $0.1|
|Your Trading P&L = ||£108 profit|
|Example 2 ||Gold falls and the spread betting market is revised and changes to $1,790.0 - $1,790.4. |
|Limit the Loss? ||You can choose to keep your gold bet open or close it and restrict your losses. In this example you decide to close your position by selling the market at $1,790.0.|
|Your Trading P&L = ||(Closing Price - Opening Price) x stake per $0.1|
| ||($1,790.0 - $1,801.7) x £1 per $0.1|
| ||-$11.7 x £1 per $0.1 |
|Your Trading P&L = ||-£117 loss|
Fully Worked Trading Example | Going Short of Gold
Spread betting on the metal to decrease in value
|You Now Choose to Go Long or Short:
Gold to move:|
Above $1,801.7? or
|Let's Assume You Want to Go Short:||
|You Choose Your Stake, Let's Say You Select: ||£2 per $0.1|
|What Happens Now?
- You lose £2 for each $0.1 Gold pushes above $1,801.3
- You win £2 for each $0.1 Gold drops below $1,801.3
|If You Are Speculating on a Market to Decrease Your Trading P&L = ||(Opening Price - Closing Price) x stake per $0.1 |
|Example 3 ||Gold moves lower and the financial spread betting market adjusts and moves to $1,794.4 - $1,794.8.|
|Lock in Your Profit? ||You may opt to leave your gold trade open or close it and lock in a profit. For this example, you decide to close your trade by buying the market at $1,794.8.|
|Your Trading P&L = ||(Opening Price - Closing Price) x stake per $0.1 |
| ||($1,801.3 - $1,794.8) x £2 per $0.1 |
| ||$6.5 x £2 per $0.1|
|Your Trading P&L = ||£130 profit|
|Example 4 ||Gold moves higher and the gold market is adjusted and moved to $1,807.9 - $1,808.3.|
|Time to Limit the Loss?||You can choose to let your spread bet run or close it and restrict your loss. In this case you choose to close your trade by buying at $1,808.3.|
|Your P&L = ||(Opening Price - Closing Price) x stake per $0.1 |
| ||($1,801.3 - $1,808.3) x £2 per $0.1|
| ||-$7.0 x £2 per $0.1|
|Your P&L = ||-£140 loss|
- Financial spread betting quote taken from InterTrader: 15 September 2011
- Gold is traditionally priced in dollars per troy oz
- Most spread betting companies will also allow you to speculate on Gold in euros per $0.1 and US dollars per $0.1
- Spread betting also allows you to gain access to a large variety of other markets, for more details please see:
Where can I find Gold Charts and Real-time Gold Prices?
Where to Trade Gold Tax Free*
You can speculate on Gold tax free* with the following spread betting companies:
The Gold Market
Gold was once dismissed by the economist John Maynard Keynes as a "barbaric relic" although over the last three years the metal has surged in value.
Since the September 2008 lows of $682.50, the barbarous relic has hit record highs in excess of $1,900 against the US dollar. There remains the potential for more gains to come as governments and central bankers keep digging themselves ever bigger holes.
Not only has gold surged against the dollar, but it has also surged to record highs against both the euro and sterling as investors look for a safe haven from the devaluation of fiat currencies.
As mentioned above, one of the key arguments used by the critics of the gold bulls has been that the metal has zero yield and has no purchasing power. Even central bankers have had their say, with US Federal Reserve chairman Ben Bernanke answering a question by announcing that ‘gold is not money’.
On the other hand, if you look at the commodity since the previous peaks of 1980 the metal has actually underperformed relative to inflation. That suggests that there could well be more upside for spread betting investors.
One of the main criticisms of gold has been that it offers no yield, although you could make the same argument for many major currencies at the moment. Sterling, the Japanese yen, Swiss franc and US dollar all currently have negative interest rates.
Over the last three years the metal has outperformed the US dollar, the euro and the pound which are all down by more than 10%. Gold is up by more than 100%.
According to Michael Hewson of CMC Markets, "The key reason gold is becoming an attractive investment is it cannot be printed, adjusted or manipulated to the whims of central bankers and governments. This suggests that the potential for a rise to $2,500 looks ever more possible".
Although if you are thinking of spread betting on gold to rise then a word of caution. Even if gold does continue its rise, which is certainly not guaranteed, there could be large pull backs along the way. For example in August 2011 there were days when the metal dropped by $70 and even $100 in a single day.
The Gold Market, original article written 25 August 2011.
With financial spread betting you can lose more than your original stake or investment. Spread betting carries a high level of risk to your capital. Please familiarise yourself with the risks that are involved and before trading, ensure that financial spread betting matches your investment objectives. Seek independent advice where necessary.
Spread Betting on Gold - edited by MJ, 22 May 2013.
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With spread betting you can lose more than your original stake or investment. Spread betting carries a high level of risk to your capital so please familiarise yourself with the risks that are involved and, before trading, ensure that spread betting matches your investment objectives. Seek independent advice where necessary.
* Based on current UK tax law. Tax law may change and can differ depending on your personal circumstances.