Gold and silver trading is similar to Forex currency pairs trading. The size of one standard lot for gold is 100 Troy ounces, and the size of the standard lot for silver is 5000 ounces (depending on the type of account). It is also possible to open positions with a volume of 0.1 and even 0.01 of the standard lot.
Quotes for gold and silver are set in US dollars.
You can use leverage for gold trading, which is the business card of the Forex. The amount of leverage for gold is set depending on the type of account. If we speak about MT4 Fixed account, then it is the same to the leverage that has been selected for the currency pairs and it can vary from 1:1 to 1:200. If we speak about MT4 NDD and cTrader NDD accounts, then the leverage for spot metals can be as high as 1:400.
Trading of spot metals is favorably different from the purchase of physical gold in several ways:
Leverage significantly increases the possible profit.
The possibility of making a profit does not depend on the direction of the market. You can earn on the growth of the market, as in the case of physical gold, and you can make a profit on the fall of the market, just as in Forex.
When trading spot metals, there are no storage costs similarly to Forex trading,.
The spread between the price of buying and selling spot metals is minimal, and the operation of buying and selling precious metals takes a fraction of a second.
Traders can perform operations with spot metals (gold and silver) for one day, which is impossible with physical gold. When you move a position to another day, swap/rollover is charged. Swap values depend on the financial instrument and the position (short — for sale, long — for purchase) taken by the trader.
The price of gold is set daily on the London fixing – the traditional procedure, which involves banks with the highest turnover for trading this precious metal.
The object of the trade includes bars of standard size and quality, the so-called good-delivery bars.
The weight of an ingot should be 250-400 Troy ounces.
The purity of gold should be not less than 995 shares of chemically pure gold per 1000 shares of the mass of an ingot.
An ingot should be with smooth, smooth edges, without flaws on the surface.
An ingot must have a serial number, the manufacturer’s stamp*, the stamp with the weight with an accuracy of 0.025 oz tr.