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Spread Betting on Gold |
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Where to Spread Bet on Gold
You can spread bet on Gold with the following companies:
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| Gold (spread size) |
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3†† |
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| Commodities (min stake) |
£1 |
£1 |
£1 |
£1 |
£1 |
£0.50 |
£1 |
| Commodities (more available) |
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Commodities spread betting may also be available with other companies - notes.
Gold Spread Betting - Market Review
Spread Betting on Gold - 22 February 2012
The Greek bailout ignited the feel good factor in the commodities spread betting markets and sent gold soaring $24.6 to close at $1758.6, not far off the highest level, $1763.2, seen since last November.
Already though investors are having doubts over the new deal and these doubts will test the strong performance seen over the last few days. Currently, the precious metal is trading down at $1756.9.
Spread Betting on Gold - 21 February 2012
Gold benefited from the bailout deal, allowing the yellow brick to post a gain of $10.7 to close the day at $1733.5, also helped by traders dumping safer assets such as the US dollar.
Another factor in the rally came from investors using the precious metal as a hedge against inflation as China refocused on its economic growth policy, which bears the risk of allowing inflation to make a comeback. Currently, gold is continuing its gain and is trading up at $1740.0.
Spread Betting on Gold - 20 February 2012
Gold spreads were given a boost in early trading on Friday as US inflation rose 0.2% in January compared to last month. However, this hike was short lived as investors were faced with a long weekend due to the Presidents Day holiday in the US.
As a result, profit taking was the name of the game causing the yellow brick to end the session down $4.6 at $1723.1. At time of writing though, it’s started the week on a positive note and is trading up at $1730.6.
Spread Betting on Gold - 17 February 2012
Gold found some short term support at $1710, once again bouncing back to over $1720 and this morning is at $1731 as it enjoys the same strength that indices are seeing.
The precious metal has yet to break to new highs and doubts still remain about the recent rally but this morning's strength indicates that the bulls haven't given up the fight yet.
Targets to the upside are seen at $1737, $1742 and $1752 meanwhile support is seen at $1705 and $1692.
Spread Betting on Gold - 16 February 2012
The gold spread betting market has also suffered a little from directionless trade. We’ve highlighted before that the recent inability to take out the highs around $1760 is starting to make some of the bulls nervous.
The fear is that this could be the beginning of a greater correction to the downside, into the sub $1700 region. This morning the yellow brick is some $10 softer at $1715.
Spread Betting on Gold - 15 February 2012
On the commodities markets, doubts that Greece will be able to uphold its side of the belt-tightening deal proved to be good resistance for gold yesterday, with investors searching for safety in the US dollar.
On one side of the see-saw is fear that the situation with Greece could still be contagious, and thus create liquidity problems in the market place. However, on the other side, if the European nation gets another break, investors could see the yellow brick resume its upwards trend.
Overall, gold lost $1.8 to close at $1720.5, but at time of writing the bulls seem to be heavier with the precious metal up at $1727.5.
Spread Betting on Gold - 14 February 2012
The gold spread trading market is starting to look a little bit worrying for the bulls at the moment. Rallies are short lived and the yellow brick simply can’t seem to get beyond its recent highs around $1760.
At $1715 this morning it seems to be finding a little bit of support for now but the key levels are seen at $1704 and $1692 to the downside being support with $1733 and $1742 to the upside being resistance.
Spread Betting on Gold - 13 February 2012
The bulls spread betting on gold to rise were fighting a losing battle against the dollar during Friday’s trading as investors cashed in on profits ahead of the weekend.
Another reason for the slump was the requirement to cover margin calls in the falling equity markets, meaning that traders were closing out of the precious metal to free up money.
No one will forget the lingering issue with Greece and this means that risk adverse participants have been pushed out to the sidelines while the volatility remains, despite gold being used as a hedge in previous times of trouble.
So by the end of the day, the yellow brick had shed $8.1 to close at $1721.3, which at time of writing has been reversed and now the level sits at $1731.1.
Spread Betting on Gold - 10 February 2012
Gold has had a bit of a see saw action in the past couple of days. After testing $1760, down to $1720, up to $1750 and now back down to below $1720 this morning.
Over the short term a little concern for the bulls to see gold fail to make a higher high as the most recent bounce failed to take out the $1760 at two attempts, so are the bulls drying up?
It will be interesting to see how the action pans out today and whether support around $1710 to $1700 will hold, because if not we might see a drive lower towards $1680.
Spread Betting on Gold - 09 February 2012
On the commodities spread betting markets, gold recovered to the $1750 level and looked like it was going to head beyond its recent highs. However, its fuel just ran out and it dipped back to the mid $1720s.
This morning the yellow brick is at $1734 looking evenly poised as the bulls weigh up whether the momentum is there to lift it beyond the recent highs around $1760.
Spread Betting on Gold - 08 February 2012
Gold enjoyed a strong bounce yesterday as it looks to be reversing recent weakness and turning what looked to be rather bearish near term signals back into bullish ones.
As yet another dip looks to have turned into a buying opportunity for the bulls the yellow brick is trading back at $1750 having reached a low at around $1710 yesterday.
Gold spread betting analysis suggests that near term support and resistance are seen at $1735/30/25 and $1755/64/75 respectively.
Spread Betting on Gold - 07 February 2012
On the commodities spread betting markets, the bears seem so be outweighing the bulls on the gold see-saw and yesterday saw a further retracement in the precious metals price. Concerns over the Greek sovereign debt sent investors fleeing into the safety of the US dollar.
After a powerful rally in January, it seems that traders’ worries have been grounded and the realisation that at any moment something nasty could materialise in the Eurozone means that we’re seeing regular bouts of profit taking.
So by the end of yesterday’s session, gold had lost $4.8 to close at $1720.1, which at the time of writing has been added back on with the yellow brick, trading back up at $1725.4.
Spread Betting on Gold - 06 February 2012
After the surprisingly better than expected US NFP figure, investors started banking their profits in gold and reinvesting into riskier assets, happy to ride the wave of optimism that was engulfing the markets.
Consequently, the precious metal lost $33.2, bringing it down to $1725.8 meaning that the week’s gains were wiped off and thus changing the outlook to neutral.
At time of writing, the yellow brick trades down further still at $1724.9, in line with weaker equity markets and since the break below some near term technical levels, a few of the bulls are having their nerve tested.
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.
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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.
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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:
- 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".
Whatever your point of view is on the metal, Gold can be an interesting market to trade and it sees some impressive price movements:
- 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
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
 Below $1,801.3
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: |
Gold going:
Above $1,801.7? or
Below $1,801.3?
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| You Might Choose to Go Long: |
Above $1,801.7 |
| 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
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| When Speculating on a Market to Go Up Your Trading P&L = | (Closing Price - Opening Price) x stake per $0.1 |
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| 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
Below $1,801.3?
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| Let's Assume You Want to Go Short: |
Below $1,801.3 |
| 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
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| If You Are Speculating on a Market to Decrease Your Trading P&L = | (Opening Price - Closing Price) x stake per $0.1 |
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| 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 |
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| 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 |
Gold Notes:
- Financial spread betting quote taken from InterTrader: 15 September 2011
- 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 February 2012.
For related pages and articles see:
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Gold Bullion Spread Betting - guide last updated: 03 February 2012
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Spread Betting on Gold Bullion - guide last updated: 20 January 2012
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Gold Market Spread Trading - guide last updated: 06 January 2012
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Financial Spread Betting on the Gold Market - guide last updated: 23 December 2011
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Online Gold Market Spread Betting - guide last updated: 09 December 2011
Online Gold Market Spread Betting: a comprehensive look at Online Gold Market Spread Betting with a Gold Market trading price comparison, how to trade the Gold Market and Gold Market commentary where investors were shedding their gold positions yesterday as the days favourite was the US dollar. ECB president Mario Draghi, said that ...more: Online Gold Market Spread Betting.
Gold Spread Trading - guide last updated: 25 November 2011
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Financial Spread Betting on Gold - guide last updated: 11 November 2011
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Online Gold Spread Betting - guide last updated: 28 October 2011
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Gold Spread Betting UK - guide last updated: 14 March 2008
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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.
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* Based on current UK tax law. Tax law may change and can differ depending on your personal circumstances.
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