Best Gold Trading Brokers 2018
As a gold trader, the broker you trade with can make or break your trading experience. We have compiled a list of the very best gold trading brokers based on reliability, quality of the trading platform and excellent service. In-depth research and feedback from users have formed the crux of criteria we have used to select these brokers.
Gold Trading Explained
- How to Choose a Gold Broker
- Gold Trading Platforms
- Gold Automated Trading Software
- Gold Trading Account Types
- Commissions and Spreads
Gold is a spot metal that is traded on commodity exchanges as well as on forex platforms as a CFD asset. Gold is classified as a hard commodity, which is extracted from the ground. Gold is a tradable asset which is traded on contracts. Available contracts for gold trading include:
- Spot contracts
The primary market for gold trading is the futures market, located in the US and London. The gold futures market is traded round the clock, except for a one-hour break within each trading day when the open outcry markets shut down and the CBOT markets kick in.
Most of gold trading done in today’s market features the spot contracts (immediate settlement) and the futures contracts (settled in the future after 1 – 3 months).
Generally speaking, gold is traded mostly as spot contracts or futures contracts. It is possible to conduct spot and futures contract trading on gold on the primary futures market: CME, COMEX, CBOT and NYMEX. The margin requirements for these trades on the exchanges are very high and are mostly out of the reach of retail traders. Retail traders are able to access gold trading via the forex platforms, which list the gold asset as a pairing against the USD or Euro. In this form, gold is traded as a contract-for-difference instrument, which does not involve physical exchange of the asset.
Gold prices are mainly impacted by the state of the financial markets. Gold is used as a safe haven for capital preservation when there is uncertainty in other markets.
How to Choose a Gold Broker
The predominant factors which you must consider in choosing a gold broker are:
- Trading platform type
Certain regulations guide the trading of gold. For instance, the trading of gold is regulated by the Commodities and Futures Trading Commission (CFTC). The CFTC sets regulations on how retail participation in gold trading can be carried out, and sets out mandates for brokers on enforcement of same. For instance, brokers are mandated to offer gold futures and options contracts at a leverage not exceeding 1:20. This rule effectively locked out many traders from the platforms of US brokers.
We see more of retail gold CFD trading on the platforms of ASIC-regulated, CySEC-regulated, and FCA-regulated brokers. The contract specifications will differ from one region to another. Ensure you are able to select a broker that makes it affordable for you to trade gold.
Gold Trading Platforms
The platforms that are offered for gold trading are also important. Many market makers offer the MT4 platform and list gold as a pairing against the USD (XAU/USD) on these platforms. You will also see gold listed on brokerages that offer the ActTrader and JForex platforms, as well as the cTrader and the various mobile apps.
Prior to 2015, users of Currenex were unable to trade gold as a listed asset as this professional trading platform was solely dedicated to the trading of currency assets. However, gold trading was introduced into Currenex on January 19, 2015 as a pairing of both gold/USD and gold/EUR.
Gold Automated Trading Software
Gold can be traded with EAs. The platforms on which gold CFDs can be traded have been identified. EAs can be programmed for them using the various programming languages. Professional traders who trade with advanced platforms such as Currenex, LMAX and cTrader, have to opt for algorithmic trading software which is offered as part of the general package provided to traders.
Gold Trading Account Types
Gold can be traded in both directions: upwards or downwards. Some brokers know the inherent risks involved in trading of gold, and that is why they have come up with various strata of accounts to cater for different categories of traders. Although each broker will present their own variety of trading accounts, there is a broad classification of gold trading account types into three:
- Micro account: This is the beginner level account which caters to those that are very new in the market. Contract sizes are usually restricted to not more than 10 troy ounces. This account is reserved for traders who can only come up with less than $1000 in account capital.
- Gold accounts: These are the intermediate level accounts, and are usually reserved for traders who can afford between $1,000 and $9,999.
- VIP/Platinum accounts: these are the accounts meant for those retail traders with lots of cash to spare. The contract specifications are arranged in such a manner that these traders can trade larger contract sizes (usually measured in troy ounces). Account capital requirements that start with as high as $25,000 are the norm here.
Commissions and Spreads
Gold trading on forex platforms is usually commission-free. However, gold is marked out from other assets as having the largest spreads of any asset on the forex platforms. Some platforms offer gold with spreads of up to 80 pips. This, combined with the margin requirements, make gold more expensive to trade than the regular currency pairs.
Traders who want to trade gold have to be prepared financially for it. The range of price movements can be very high. Price movement between the high and low prices on November 9, 2016 was as high as $68.50, equating to 6,850 pips. This sort of volatility is not what a trader should toy with.
We have a list of gold trading brokers for you. How did we come up with this list of brokers?
- We selected brokers that are regulated.
- We also selected brokers that offer several account types, knowing that no two traders are the same and therefore a “one account fits all” model will not work for all traders.
- We chose brokers that had an allowance for traders with less than $500 to come on board, to get a feel of the live market with reduced trade sizes.
- We looked at platform accessibility and trading conditions.
- New Zealand
- South Africa
- South Korea
- Hong Kong
- United Arab Emirates
- Russian Federation
List of Brokers
|BROKER||USER RATING||REGULATED BY||HEADQUARTERS||MIN. DEPOSIT||OFFICIAL SITE|
|ASiC, CySEC, FCA||Israel||$100||Open Account|
CFD Service. 80.6% lose money
|ASiC, BVI, FSA(JP), FSB, MiFID||Ireland||$100||Open Account|
Your capital is at risk
|CySEC, FCA||Cyprus||$50||Open Account|
Your capital is at risk
|CySEC, FSB||Cyprus||$100||Open Account|
CFDs carry risk. 73% of traders lose
|BaFin, FCA||United Kingdom||$300||Open Account|
Your capital is at risk