Gold is often considered to be the safest asset, as it normally withstands market turbulence and retains its value during periods of uncertainty. Spot gold and silver trading, which is not leveraged, is available 23 hours a day, from 18:00 ET on Sunday to 17:00 ET on Friday. Operations are closed every day from 17:00 to 18:00 ET; however, you can place new work orders or edit and cancel existing work orders during that time. Gold and silver spot transactions also follow the CME Christmas closures.
When you trade in the spot gold markets, the price you see shows the asset's current market value. Unlike futures contracts, spot gold markets are decentralized and are traded 24 hours a day, while futures trading has specific opening and closing times. Will the combination of the recent behavior shown by gold, USDX and S%26P 500 cause the resumption of the downtrend in the gold market? The main news last week was the third consecutive week of depreciation in oil prices, which this morning continues to worsen for countries with high levels of oil exports. Traders also use gold to hedge against inflation and diversify their investments because gold often reacts differently to market stimuli than other assets.
The following graph shows the relationship between gold prices and the performance of TIPS, an indicator of real interest rates in the United States. The table below provides a summary of the trading requirements between gold futures and spot gold instruments. So which market should you trade in? The following table provides a quick overview of the costs incurred with intraday trading and oscillating trading in gold futures and spot gold markets. One of the main factors that differentiate gold futures from the spot gold markets is the fact that one-day positions can only be held until the last trading day of the gold futures contract, which is normally the third last business day of the contract month.
Please note the possibility of illiquid market conditions occurring outside of New York trading hours (8 a.m. At 5 p.m. (ET) Spot transactions in gold and silver also occur after the close of CME holidays. Therefore, for day traders (positions held during the day), it is cheaper to trade spot gold.
Both spot gold and gold futures markets have their own advantages and disadvantages, such as the ability to see volume in the futures markets and centralized exchange, versus the OTC nature in spot markets. Therefore, longer-term traders may want to consider buying opportunities if real returns are below 1%, a level that has historically supported gold prices. In the swing trading position example above, you can see that overnight swaps add up to some costs of a position you hold for a period of 5 days (including 7 days due to the triple renewal on Wednesdays) when trading in the spot gold market. In gold futures, the price you see is the liquidation price at which buyers and sellers agree to buy or sell gold futures contracts.
With the exception of a few minor differences in prices, gold futures and spot gold markets are completely the same. Starting from the basics, which is the minimum lot size for trading, the position of the spot gold markets can be opened with 10,000 units or 0.10 lots. The maximum position a customer can hold at any given time is 10,000 troy ounces for spot gold and 250,000 troy ounces for spot silver. .