Gold trading is not all about buying and selling the physical asset. In fact, online trading can provide more benefits and this is where gold trading in CFD brokers comes.

Gold has always been everyone's favorite when it comes to investment. However, did you know that you can easily invest in gold without buying the physical asset? If not, you should start paying attention because trading gold as CFD offers a big deal of benefits with promising returns.

Gold CFD

 

Should I Trade Gold with CFD brokers?

Well, to answer this question that you probably have in mind since the very beginning, let's unpack this fact. These days, forex brokers did not only provide traders with currency trading but also connected clients to other potential markets through its CFD offering.

If you wish to trade in gold, not the physical but the online one, you should consider the offering of XAU/USD trading in forex brokers. It is just like any other trading pair like EUR/USD, GBP/USD, and so on. Meaning, you can earn profits from the price difference. The practicality in trading gold this way can be seen when you can benefit from both the price rise and fall. It's pretty much different when you're trading physical gold because you can only get a profit from the price increase.

Apart from that, there are other advantages that you may consider:

 

1. Accessible to Everyone

You should notice that whenever someone wants to trade their physical gold, one needs to wait until the office hour is open and go to a certain store to make a profit from gold. You certainly won't face this issue because trading gold CFD means you don't have to hold the asset in order to benefit from the price movement.

This certainly provides more access for everyone who wants to trade gold from anywhere they want. In fact, trading gold CFD can be done with just a few clicks and only need an electronic device (PC/laptop/smartphone) with a good internet connection aside from the capital that you use to open trades.

 

2. Cost-Effective

One thing that differentiates trading gold in CFD brokers and the traditional way of trading the physical asset is you will not get any extra costs for storing or transporting the instrument. Since everything is traded online, you can eliminate any additional cost that comes with buying or selling physical gold.

 

3. More Flexible

When trading gold CFDs, you don't need to wait until the price moves up to sell your asset. The high liquidity of gold CFDs allows you to take advantage of price movements whether the market is rising or falling. If you predict the price of gold will rise, you can make a long position (buy). Conversely, if you predict the gold price will move lower, you can make a short position (sell).

Gold Trading CFDs

Furthermore, trading gold in CFD brokers is more flexible because CFDs are leveraged financial products. You do not need to make a deposit of the full amount of your trade size. With leverage, you only need to make sure that you have the margin required to open a trade, which is usually 10x to 100x smaller than the actual size depending on what leverage you use. For example, if you get 50:1 leverage for a $50,000 position size, you only need to provide $1,000 as the minimum margin to open a trade. When the leverage is 100:1, you only need $500 to open a trade.

 

4. Liquidity

The estimated gold trading volume is around $70 billion per day, more than most currency pairs except some major currency pairs. High trading volume results in high liquidity for gold CFDs. With high liquidity, gold CFDs are cheaper to trade than other financial instruments, and the commissions charged are usually very small. In addition, selling CFD contracts is also easy due to the high liquidity, unlike what happens in physical gold transactions.

See also: Gold Price Today

 

5. Easy to Diversify

If you are new to trading, you might wonder what exactly is risk diversification. Any investment is not without risk and one should secure their investment in order not to lose all of their investments when a market is going down. One of the most effective ways to reduce such risk is called diversification.

To do this, you only need to divide your investment into various types of assets. So, whenever an asset price is at a disadvantage, you won't lose all your money. Trading gold in CFD brokers is fast and easy, so you don't have to go through many processes whenever you want to change from gold to other assets. In addition, gold is known as a safe haven so one may look into other riskier assets if they want to pursue higher profit opportunities during risk-on conditions.

Tell us what you want to find

Now that we've explored the 5 benefits of gold trading in CFD brokers, you may wonder where to start. Any forex brokers offering CFD trading basically provide the opportunity to trade gold CFD. Still, there are certain things to consider when it comes to choosing a good broker to trade gold. With the essential factors in mind, here are some recommended brokers to trade gold CFD:

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Rating

General Rating 3.87/5
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Office(s) China, Cyprus and United Kingdom Australia, Hong Kong and Viet Nam Australia, Cyprus, Greece and Hungary
Regulation ASIC 491139
CySEC, 109/10
FCA (UK), FRN 583263
Financial Services Regulatory Authority (Abu Dhabi), 21.09.2022
FINRA, 298361/SEC#: 8-70212
ASIC, ACN 123 289 109
CySEC 362/18
Securities Commission of The Bahamas, SIA-F214
The Financial Commission, 25.11.2021
ASIC, 443670
BaFin 124161
CNMV (Spain), 2010157773
CONSOB (Italy), 3046
CySEC, 120/10
FCA (UK), 538324
FSP (New Zealand), FSP235905
IFSC (Belize), 000261/309
ESMA
Established 2007 2007 2009
Minimum Deposit $200 $200 $5
Maximum Leverage 1:400 1:500 1:888
Spread Fixed Variable Variable
Commissions $3.50 $3.50
Minimum Position 0.1 lot 0.01 lot 0.01 lot
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Fidelia Robson

Sep 12 2022

I have some questions regarding payment options in eToro.

- Is there any deposit or withdrawal fees in eToro?

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Warren Walsh

Sep 15 2022

Overall I think that this broker is a good one...they also have pretty good customer service. well, sometimes it can take a while to answer my questions but it is better than not getting any answer at all.

I would switch to the chat room version but it somehow can't show my previous chat, and it always looked like this:

WTH happened? Pretty sure I send some messages there-no doubt.

My tip for IC markets is that I hope they can upgrade their customer service features to be quicker and better. After all, traders' problems are often urgent and they need an answer ASAP.

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Wayne Finnie

Feb 18 2020

Vincent Howlett: 

Open real accounts with CFTC, NFA, FCA, FSA, FINMA, MiFID, ASIC and FMA regulated brokers.

The brokers below are good because they have strict regulations and have a long history of forex trading.

IG (min deposit $300), Forex.com (min deposit $1,000), Oanda (no minimum deposit), Saxobank (min deposit $5,000), XTB (min deposit $250), Dukascopy (min deposit $1,000)

Those brokers are different from offshore regulations such as Cyprus, British Virgin Island, Vanuatu, Grendlines, Belize, etc. You can also check the detail of each broker above, including regulatory aspects, company history, to liquidity providers.

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