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What is Gold CFD trading?

Traders can profit from the price movements of commodities, such as the precious metal gold, without actually having to own any gold. A very common and popular way to do this is through derivatives trading, also known as CFD (contract for difference) trading. This way, a trader doesn’t actually buy any physical gold but rather enters into a temporary order to buy or sell a pre-stated theoretical amount of gold. Profits and losses are determined by changes in the gold price while the contract is active. All gold CFDs have a specified contract duration. The most popular CFD symbol for trading gold is XAU/USD as gold is traded against the greenback.

What are the benefits of trading gold with contracts for difference?

Trading CFDs has become very popular amongst traders and there a couple of exclusive benefits over other investments when trading gold as a CFD. For example, unlike copper, there is no expiration on the contract, so investments can be held as long as the trader wishes. Unlike stocks, gold offers perceived stability for many traders, especially in economically unstable times. While stocks are looked at as investments that pay off with the growth of the companies, gold is a safe haven in times of political turmoil.

Another benefit of trading gold CFDs is that CFDs can be leveraged. Using leverage is a popular way to increase one’s stake to gain bigger profits. On the other hand, using leverage in spread betting can lead to high risk exposure, where losses can also be increasingly high.

How can I trade gold?

Unlike other commodities, the international gold market is a globe-spanning market with continuous 24-hour operation, thus investors can trade gold around the world market at any time. The London stock exchange, as an example, operates Monday to Friday from 8.00 am to 5.00 pm GMT.

After carefully selecting a broker that offers gold CFD trading and opening a trading account, traders can start trading gold from within any trading platform. As is the case with any other complex instrument in financial markets, investors can enter long or short positions when trading gold.

Another way to trade gold is with gold futuresGold futures are contracts that indicate how much gold will be delivered in the future at a predetermined price. These gold futures contracts are often used by investors to manage price risks.

Who are the best brokers that allow gold CFD trading on their trading platforms?

As always, a trader should make sure that the forex broker of choice is properly licensed and regulated. The best brokers are typically those that are registered with strong regulators and industry watchdogs such as the FCA (Financial Conduct Authority) in the United Kingdom, the ASIC (Australian Securities and Investments Commission) of Australia, or the CySEC (Cyprus Securities and Exchange Commission) of Cyprus.

One top forex broker we found offering currency exchange (FX), indices, and commodities trading is AxiTrader. This broker allows for a maximum leverage of up to 400:1, has no minimum deposit requirement, and low margin requirements on gold trading of just 1%. They are licensed and regulated by ASIC, allow trading on the popular MT4 trading platform, and offer low spreads and commissions. They also offer two types of retail investor account options. For example, their MetaTrader4 Pro Account shows the raw interbank spread received from liquidity providers, and a commission fee of US$7 per standard lot round turn applies when using this account option. No additional fees are charged for trading any forex or CFD products.

Find The Best Gold CFD Trading Forex Brokers for your needs

To help you find the Forex broker that is best suited to your needs, take a look at our comparison table and ranking of best gold CFD trading Forex brokers above. If you require more in-depth information or are looking for more brokers to choose from, check out our detailed individual broker reviews and additional comparison tables.