Best Gold Trading Brokers 2020

Gold is highly tradable. Commonly seen as a great store of wealth, this precious metal is also known as a reliable safe-haven asset. Uncertainty in the market, especially from geopolitical and economic drivers, pushes people into investing in metals like gold. 

Since the recession of 2008, many people have flocked to gold, to protect themselves against market volatility. But, the problem with gold is that actually owning it takes a lot of space. Gold is bulky. So now, more and more people are trading it as a CFD. That means speculating on its price movement, rather than owning the underlying asset. Many brokers offer it on their platforms and it is almost always found on the MetaTrader 4 platform.

The brokers below represent the best brokers for gold trading.

Here’s a list of the Best Brokers for Gold Trading:

• FXTM
• XTB
• BDSwiss
• OctaFX
• FXCM
• FP Markets
• Plus500
• Tickmill
• Gold Trading Explained

Note: Not all Forex brokers accept US clients. For your convenience we specified those that accept US Forex traders as clients

FXTM

FXTM, short for ForexTime, is a platform with a primary focus on foreign exchange. That specialization allows it to rise above many others when it comes to Forex focused trading platforms and tools. CFDs are available on 50+ currency pairs including major, minor, and exotic pairs. Leverage is available up to 1000:1.

Spreads are competitive across all platforms with 24-hour trading open 5 days per week. FXTM is based in Cyprus and licensed by the International Financial Services Commission (IFSC), Cyprus Securities and Exchange Commission, and other regulators in and out of the EU. A free demo account is available. 

XTB

XTB is an award-winning CFD platform that supports Forex, indices, commodities, stock CFDs, ETF CFDs, and cryptocurrencies. For Forex, XTB supports 48 currency pairs with low-cost spreads. Customers of XTB can choose between trading on the xStation 5 or MT4 platforms. For leverage accounts, this brokerage offers leverage of up to 200:1.

Stock and ETF CFDs all attract a fixed commission of 0.08% per lot across the two types of accounts.

XTB was founded in 2002 with headqיuarters in Warsaw. It is regulated in markets across Europe by the IFSC, FCA, KNF, and CySec. XTB has a free demo account and a Trading Academy set of courses for beginner and intermediate traders.

BDSwiss

BDS Markets Ltd is an online financial services provider licenced and regulated by the FSC Mauritius, offering forex and CFD for trading on its online trading platforms. Its sister company BDSwiss Holding PLC is operating under CySEC licence No 199/13, Today, BDSwiss Holding PLC  is located in Limassol, Cyprus and has a Tied Agent in Germany.  Both companies belong to the BDSwiss Group of companies.

OctaFX

OctaFX was founded in 2011 and offers Forex ECN trading, as well as CFD trading on Indices, Metals and Cryptocurrencies, across the MetaTrader and cTrader suite of trading platforms for Windows Desktop, Web (Windows and Mac) and Mobile (Android and iOS), as well as their own OctaFX Trading App.

The tradable products available from OctaFX vary depending on the type of account opened (MT4 Micro, MT4 Pro, cTrader ECN) but covers Forex, Indices, Metals and Cryptocurrencies.

FXCM

Founded in 1999, FXCM Group is an international online forex and CFD brokerage brand. In the UK, the FXCM brand is managed by FXCM Ltd. The company is based in the UK and its head office is located at 20 Gresham Street, 4th Floor, London EC2V 7JE, United Kingdom.

The brokerage firm also maintains offices in several jurisdictions such as Australia and South Africa. The broker is well known in the online trading community for suffering massive losses when the Swiss franc was unpegged from the US dollar in 2015. Having recovered from the crisis, FXCM today is focused on catering to the trading needs of both beginner traders and experienced traders.

FP Markets

FP Markets was founded in 2005 and is regulated by the Australian Securities and Investments Commission (ASIC), offering segregation of client funds and top tier liquidity. FP Markets is a group of companies that includes First Prudential Markets Ltd which is authorised and regulated by the Cyprus Securities and Exchange Commission.

The broker offers the ability to trade on more than 10,000+ financial instruments covering Forex, Equities, Metals, Commodities, Indices and Cryptocurrency CFDs. Users have access to a range of accounts including the Standard Account (commission-free) and Raw Account (commission-based) for MetaTrader users, both offering ECN pricing and maximum leverage of 500:1. Users can also access Iress Accounts which are commission-based.

Plus500

Plus500 is a leading CFD trading platform with support for stocks, indices, cryptocurrencies, and Forex. This commission-free brokerage charges very low spread-rates and offers fast trades on a great platform. Plus500 supports complex trades, includes negative balance protection, and makes trading an educational and hopefully profitable venture.

You can start with a free demo account to test the platform and any trading strategy. Real money accounts offer leverage of up to 1:30. This broker is based in Israel and regulated by the Financial Conduct Authority (FCA) in the UK. 

Tickmill

Tickmill was founded in 2014 and is regulated by the UK Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC) and the Seychelles Financial Services Authority (FSA).

The broker provides more than 80+ CFD instruments to trade on covering Forex, Indices, Commodities and Bonds through three core trading accounts called the Pro Account, Classic Account and VIP Account. They also offer a demo trading account and Islamic swap-free account.

Gold Trading Explained

• How to Choose a Gold Broker
• Regulation
• Gold Trading Platforms
• Gold Automated Trading Software
• Gold Trading Account Types
• Commissions and Spreads
• Conclusion

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
• Forwards
• Futures
• Options
• NDFs

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 BrokerThe predominant factors which you must consider in choosing a gold broker are:

• Regulation
• Trading platform type
• Software

RegulationCertain 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 PlatformsThe 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 SoftwareGold 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 TypesGold 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 SpreadsGold 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.ConclusionWe 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.

Read More:

• Forex Brokers Regulations
• How to Be Successful on the Oil Market
• Brent and WTI: Where Differences Lie
• Trading Natural Gas
• Using Commodities as a Guide for other Assets