HF MarketsVisit HF Markets70.51% of retail investor accounts lose money
IG MarketsVisit IG Markets68% of retail CFD accounts lose money
eToroVisit eToro76% of retail CFD accounts lose money
AdmiralsVisit Admirals76% of retail investor accounts lose money
Forex.comVisit Forex.com81% of retail investor accounts lose money
AvaTradeVisit AvaTrade76% of retail investor accounts lose money
City IndexVisit City Index70% of retail CFD accounts lose money
CMC MarketsVisit CMC Markets78% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider.
FBSVisit FBS74-89% of retail CFD accounts lose money
Plus500Visit Plus50077% of retail investor accounts lose money
Gold trading broker refers to brokerage firms that allow individual investors to buy and sell gold as a commodity or a contract for difference (CFD) on various trading platforms.
Gold trading brokers are often reffered to as “gold trading platforms” or “gold trading accounts” or sometimes simply “gold brokers”.
This flourishing sector of the financial markets allows traders to speculate on gold prices without the need for physical ownership, and through this article, we aim to guide you in identifying the best gold trading brokers.
Choosing a gold broker for trading gold online involves considering several factors such as regulatory oversight, commission rates, and the range of gold derivatives offered. In fact, gold can be traded via several methods such as the Spot Market, Futures Market, CFD Market, and Option Market.
Gold markets can be navigated through various platforms, with brokers regulated by authorities like NFA, ASIC, or FCA offering secure experiences.
It’s important to consider trading costs, including commissions, which can take the form of pips on CFDs or a fixed amount on gold futures. The chosen gold trading platform should align with the trader’s goals and provide the desired gold derivative for trading.
Trading gold through CFD brokers introduces additional conditions like the application of spreads, overnight and conversion fees, and limitations on leverage. When using brokers for gold trading, fees such as mark-ups on the buy-sell price, overnight fees for holding positions, and conversion fees for trades in currencies other than USD should be expected.
In order to choose which gold trading brokers to feature in this top 10, we have took into consideration a number of factors including:
- The availability of tradable gold instruments;
- Commissions charged by the broker on gold;
- The different methods of investment offered on gold;
- The minimum contract size on gold assets;
- The regulation of the brokers.
Find below a comparison table showing the differences and similarities of each of the 10 gold forex brokers.
|BROKERS||TRADED AS||MINIMUM CONTRACT SIZE||XAG/USD SPREAD||MINI-GOLD CONTRACTS|
|HF Markets||Spot||1 oz||0.023 pips||No|
|IG Markets||Spot, Futures, Stocks||2 oz||0.030 pips||No|
|eToro||Spot, Futures, Stocks||1000 USD||0.045 pips||No|
|Admiral Markets||Spot, Futures, Stocks||1 oz||0.010 pips||No|
|Forex.com||Spot, Futures||1 oz||0.025 pips||No|
|AvaTrade||Spot, Futures, Options Stocks||1 oz||0.029 pips||No|
|City Index||Spot, Futures||N/A||0.003 pips||Yes|
|CMC Markets||Spot, Futures, Stocks||0.4 oz||0.003 pips||No|
|FBS||Spot||1 oz||0.031 pips||No|
|Plus500||Spot, Futures, Stocks||1 oz||0.0553 pips||No|
What are the best gold trading brokers and platforms?
How to Choose a Gold Trading Broker
When selecting a gold trading broker, it’s essential to consider several factors to ensure a smooth and profitable trading experience. Here are some key points to keep in mind:
- Regulatory oversight is crucial for the safety and security of your funds. Look for brokers that are regulated by reputable financial authorities such as NFA (National Futures Association), ASIC (Australian Securities and Investments Commission), or FCA (Financial Conduct Authority) in the UK. These regulatory bodies enforce strict rules and guidelines to protect traders and maintain the integrity of the financial markets.
- Trading gold often involves paying commissions, so it’s wise to find a broker with competitive commission rates. Typically, gold brokers charge commissions either in the form of pips on CFDs (Contracts for Difference) or a fixed amount per contract on gold futures. Look for brokers offering reasonable commission rates, such as 1 pip on CFDs or $1 per contract on futures, to minimize trading costs.
- Check if the broker offers the gold derivative you want to trade as not all brokers offer the same range of gold derivatives for trading: some brokers, like Interactive Brokers (IB), provide a wide variety of gold derivatives, including options, CFDs, and futures. On the other hand, platforms like eToro may focus more on CFDs. Choose a broker that aligns with your specific trading preferences and goals.
Resources for Gold Traders
To make informed trading decisions, gold traders can benefit from various resources that provide market insights and analysis. Here are some valuable resources to consider:
- Use news and Analysis Websites to stay updated with the latest financial news and gold market analysis. Use reputable websites like Bloomberg and investing.com.
- Use economic calendars to keep track of significant events and economic indicators that could impact the gold market. Many financial news websites offer economic calendars with dates and times for these events.
- Follow training and courses to improve your gold trading skills by enrolling in online courses offered by platforms like Coursera and Udemy. There are also specialized trading education websites that focus specifically on gold trading.
- Read books for a comprehensive understanding of the gold market and its historical background. Consider reading books like “Precious Metals Investing For Dummies.”
Ways to Trade Gold
Gold can be traded in several different ways, each catering to various trading strategies and risk appetites. The common methods for trading gold are Gold Spot Market, Gold Futures Market, Gold CFD Market and Gold Option Market.
In the Gold Spot Market, gold is traded at its current market price. This market primarily involves physical gold trading. It is important to note that over 25 million contracts are traded per day in this market.
The Gold Futures Market involves buying gold in contracts that reflect future pricing. This market allows traders to speculate on the future price movements of gold. Approximately 20 million contracts are traded per day in this market.
Gold CFD (Contract for Difference) trading is ideal for price speculation. With CFDs, traders can speculate on whether the gold price will rise or fall without owning the physical asset. The CFD market is usually based on the spot gold market.
Similar to the futures market, the Gold Option Market derives its price from gold futures contracts. However, traders have the option to decide whether to buy or not to buy the gold at the due date, providing more flexibility in their trading strategies.
Gold Trading Conditions with CFD Brokers
If you choose to trade gold through CFD brokers, here are some important conditions to be aware of:
- CFD Gold brokers typically apply a spread, which is a mark-up added to the buy-sell price. Spreads are usually from 1 pip.
- Overnight fees and conversion fees may apply when trading gold as CFDs. These fees are important to consider when holding positions overnight or when trading with a currency other than USD.
- While CFDs offer leverage, it is essential to note that the leverage is often limited to 1:20 (5% margin) in certain regions like the UK, Australia, and the European Union. This restriction is in place to protect traders from excessive risks associated with high leverage.
Fees Charged by Gold Trading Brokers
When trading gold with brokers, you may encounter several types of fees. Here are the common fees associated with gold trading:
- Brokers apply a mark-up on the buy-sell price (spread), commonly known as spreads. The spread is usually from 1 pip, and it represents the broker’s profit on each trade.
- If you hold gold positions overnight as CFDs, some brokers may charge overnight fees. These fees compensate for the cost of maintaining positions overnight.
- When you buy gold using a currency different from USD, a conversion fee may be applied. For example, if your account is denominated in EUR, and you trade gold quoted in USD, the broker may charge a fee for converting EUR to USD.
Pros and cons of gold trading brokers
- flexible trading environment
- most brokers offer news and resources to trade gold
- brokers might not always offer certain gold derivatives
- leverage may be limited in some countries
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