How and Why Trade Gold
The Gold trading market is a mature and deep market, with excellent trading liquidity offering traders the opportunity to profit from both the long and short sides, meaning that there is always profit to be made irrespective of price movement.
Gold rallied between 2001 and 2011 from approximately $255 to almost $1,900. It has now corrected for almost 4 years, reaching a low of approximately $1,060 before rallying from this level in 2016. This rally was accompanied with increased volatility in equity markets.
Note: Visit our dedicated page for real life foreign exchange trading examples.
And Why with NSFX?
NSFX Ltd. recognises that trading Gold is an integral part of many traders’ trading strategy. Consequently, NSFX provides clients with the best possible trading conditions to profit from Gold price movements, including:
- Fast execution and the tightest spreads
- Multiple platform trading capabilities (Web, desktop, mobile)
- Balanced leverage and exposure, 1:20, 5% of transaction value
- Trading flexibility – fixed spread or variable ECN spread
Trading Gold at NSFX
The following table outlines Gold trading parameters at NSFX.
|Spread||*ECN Spread||Leverage||Contract Size||Min. Trade||ECN Min. Trade|
|GOLD: XAUUSD||60||10||1:20||100||0.01 Lots||0.1 Lots|
|SILVER: XAGUSD||5||1.1||1:10||1000||0.01 Lots||0.1 Lots|
*These are averages of fluctuating spreads.
Gold Trading Hours
Gold is traded from Sunday at 23:00 GMT to Friday at 20:00 GMT. It is important to note that there is a daily break in Gold trading services between 21:00 GMT and 22:00 GMT, Trade resumes at 22:00 GMT. During the break, no trading, or placing of orders is possible.
Gold Margin Requirements
In a standard 1:20 leveraged trade, 5% of the transaction value must be set aside to cover the margin requirement. Consequently, for every $1 in the account, traders can control $20 in the market.
Gold CFD Rollover (Swaps)
In both commodities and foreign exchange markets a rollover/swap, is the interest that is added or deducted in order to secure an open position overnight. Rollover/swap rates are calculated as the overnight interest rate differential between the two currencies on which the position is held comes due, depending on the position type (Buy (Long) / Sell (Short).
Note: All rollover fees for all CFDs including: ‘Gold’,’Crude-Oil’,’Silver’ and ‘Indices’ will be charged a 1% flat fee.
It is important to consider the following aspects of rollover/swap charges:
- Rollover/Swaps are charged on client’s forex accounts only on the positions kept open into the next forex trading day
- The rollover process begins at the end of the US market trading session
- The Gold rates below are calculated and based on USD accounts per 1 Standard Lot
- Rollover/swaps are calculated and applied on every trading night. On Wednesday night rollover/swaps are charged at a triple rate (see explanation below)
Precious Metal Rollover/Swaps – Additional Information
At NSFX, rollovers are only dealt with on a ‘spot’ basis. This means that all positions are settled two business days from inception, as per market rules.
NSFX will not facilitate actual physical delivery of either precious metals/currency. As a result, all positions that are open from 23:59:45GMT to 23:59:59GMT (Server time) are rolled over to a new value date. These trades are then charged or credited the relevant rollover as shown in the table above.
Note: When an open trade is rolled over from Wednesday to Thursday on trade, the new value date shifts to Monday of the next week. As a result, the rollover charge on Wednesday evenings will always be three times the value shown in the above table. In general, it should be understood that in the case of factoring in weekends and holidays, the rollover/swap is multiplied by the number of days of the rollover.