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Markets.com

Offers five ways to trade: Forex, Shares, Indices, Commodities, ETF and CFD

 
Markets.com
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$100Min. Deposit Learn More
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Trust Score:

B

0

Established in:

2008

Regulated by:

CySEC, Financial Services Boar...

CFDs are leveraged products and can result in the loss of your capital. Rankings are influenced by affiliate commissions. All information collected on 1/11/2017.

The Ultimate Guide to

Choosing a Broker
For Trading Gold

Not sure which broker is right for you?

Don’t worry - we’ve got you covered. In this guide, you’ll learn:

Ready?

Part 1

Why Choose Markets.com
For Trading Gold?

Markets.com scored best in our review of the top brokers for trading gold, which takes into account 120+ factors across eight categories. Here are some areas where Markets.com scored highly in:

  • 9+ years in business
  • Offers + instruments
  • A range of platform inc. MT4, Web Trader, Tablet & Mobile apps
  • 24/7 customer service
  • Tight spreads from 2.0 pips
  • Used by + traders
  • Allows hedging
  • 5 languages
  • Leverage up to 100:1

Markets.com offers five ways to trade: Forex, Shares, Indices, Commodities, ETF and CFD. If you wanted to trade GOLD through copy trading or other means, skip to part two.

The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.

Markets.com have a B trust score, which is good. This is largely down to them being regulated by CySEC, Financial Services Board, segregating client funds, being established for over 9 years, and much more. For comparison:

Trust Score comparsion

Markets.com
Trust Score B
Year Established 2008
Regulated by CySEC, Financial Services Board
Uses tier 1 banks
Company Type Public Private Private
Segregates client funds

The second thing we look for is the competitiveness of the spreads, and what fees they charge. We've compared these in detail in part three of this guide.

Part 2

Who Markets.com is (& Isn’t)
Suitable For

As mentioned, Markets.com allows you to trade in five ways: Forex, Shares, Indices, Commodities, ETF and CFD.

Suitable for:

  • CFD Trading
  • Forex Trading

Not Suitable for:

To trade with Markets.com, you'll need a minimum deposit of $100. Markets.com offers a range of different account types for different traders including a mini account, vip account.

Finally, Markets.com isn't available in the following countries: AF, DZ, AS, AO, AU, BE, BA, BR, KH, CA, CN, CU, KR, GU, GY, HK, ID, IR, IQ, IL, JP, LA, MO, MY, MM, NZ, MP, PA, PG, PH, PR, RU, SG, KR, SD, SY, TW, TH, TR, UG, VI, VU, USA, VN, YE.

Part 3

A Comparison of Markets.com vs. vs.


Want to see how Markets.com stacks up against and ? We've compared their spreads, features, and key information below.



Spread & fee comparsion

The spreads below are illustrative. For more accurate pricing information, click on the names of the brokers at the top of the table to open their websites in a new tab.
Markets.com
Fixed Spreads
Variable Spreads
EUR/USD Spread 2.0
GBP/USD Spread 2.0
Gold spreads from 0.7
Silver spreads from 0.07
Copper spreads from 0.006
Crude Oil spreads from 0.05
Natural gas spreads from 0.005
DAX Spread 2
FTSE 100 Spread 2
S&P500 Spread 1

Comparison of account & trading features

Markets.com
Spread type
EUR/USD Spread 2008
EUR/GBP Spread CySEC, Financial Services Board
Crude Oil Spread
Gold Spread Public Private Private
DAX Spread

Part 4

Popular Precious Metals for traders: Gold

What is Gold?

Gold is a precious metal that is dense, reddish-yellow transition metal that belongs to the Group 11 elements. The Group 11 metals are also known as coinage metals because of their historical use as coins and include silver (Ag), copper (Cu) and Gold (Au). Nowadays, Gold is mainly used in Jewellery, electronics, medicine and as a financial instrument.

Gold is one of the most popular traded precious metals and over 125 times the annual output of actual gold from the world’s mines has been traded in a single year on the London gold exchange alone, the LBMA.

History of Gold

  • Gold is thought to have been brought to earth by metal bearing meteor about 4 billion years ago with most of the gold sinking into the earth’s crust.
  • Gold was believed to have been first used by humans during the Chalcolithic Period (Bronze Age) and artefacts have been found that are older than the current Christian era by up to four millennia.
  • Gold in the form of electrum coins – a combination of gold and silver – was first used as currency in Lydia around 700 B.C. by merchants.
  • The use of gold as universal currency, known as the gold specie standard, was first instituted by the British West Indies. This continued until a proclamation by Queen Anne in 1704 made a de facto gold standard with the Spanish gold coin.

Modern day statistics for Gold

The top 10 producers of gold:

Ranking Country Production (metric ton)
1 China 460
2 Australia 273
3 Russia 268
4 United States 214
5 Peru 170
6 South Africa 167
7 Canada 157
8 Mexico 133
9 Indonesia 113
10 Brazil 95

Top 10 Countries with the largest gold reserves:

Ranking Country Gold Reserves (metric ton)
1 United States 8133
2 Germany 3377
3 IMF 2814
4 Italy 2451
5 France 2435
6 China 1842
7 Russia 1615
8 Switzerland 1040
9 Netherlands 765
10 India 612

How is Gold Traded

Due to its popularity as an investment vehicle, gold is traded in a variety of ways. Broadly speaking they can be broken down into two major groups, physical forms and non-physical forms.

The non-physical forms in which gold is traded include:

Derivatives and CFDs

Trading Gold as a CFD is offered by most CFD brokers like London Capital Group. Trading Gold Futures and Spot Gold as a CFD has opened up the door for more traders because it requires less capital than trading a traditional Future. For example:

Minimum Trade Gold Future:
Latest price of a Gold future on the CME exchange was $1,224
Contract size for a single Gold Future contract = 100 troy ounces
Therefore a minimum trade for a single futures contract for Gold would be 100*$1224 = $122,400.
*The maintenance margin required by CME for a Gold futures contract is $5,400.

Minimum Trade of a Gold Future CFD with LCG:
Using the trading conditions offered by London Capital Group, a maximum margin for Gold of 0.5% and a minimum trade size of 0.1 lot (contract size). The minimum cost of a trade of Gold Future using London Capital Group in this example would be $61.20 (10*$1,224/200=$61.20).

Comparison of CFD Gold and Futures gold contracts

Trading conditions for Gold futures with London Capital Group

London Capital Group Trading Conditions
Market Trading hours Min spread Min trade size
Gold Futures 23:00-22:00 0.6 0.1 lot
Unit risk Value of 1 pip/lot Min Margin Guaranteed Stop change
1.00 $100 0.5% 0.4

*All information collected from https://www.lcg.com/uk/, see website for full terms and conditions. Your capital is at risk. Last updated on February 14, 2017.

100 oz Gold Future Contract example with ICE

Cocoa Futures: Market Specification
DESCRIPTION CONTRACT SIZE PRICE QUOTATION
100 oz Gold Future 100 fine troy ounces U.S. dollars and cents per oz.
SYMBOL TICK SIZE SETTLEMENT
ZG $0.10 per oz, or $10 per contract Physical Delivery
DAILY PRICE LIMIT BLOCK TRADES LAST TRADING DAY
N/A Yes. 5 contract block trade minimum quantity. Third to last business day of the contract month at 1:30pm New York time.
TRADING HOURS
CITY TRADING PRE-OPEN
NEW YORK 8:00 PM – 6:00 PM* 7:30 PM
LONDON 1:00 AM – 11:00 PM* 12:30 AM
SINGAPORE 9:00 AM – 7:00 AM* 8:30 AM

*Next Day
Market opens at 6:00pm on Sunday, for Monday’s trade date. Pre-open at 5:30pm Sunday, 7:30pm Monday through Thursday

Exchange Traded Products

These are traded on a stock exchange and include Exchange Traded Funds and Exchange Traded Notes.

Certificates

The first paper currency were gold certificates and they represent a promise by the issuer to provide a stated quantity of gold.

Certificates allow their holders to avoid the stress and risk involved in storing or carrying around a large amount of precious metal.

Gold in physical form can be traded in:

Bars

This is the most popular form in which gold is stored and traded, both in reality and pop culture.

These bars are available in various sizes including 12 kilogramme bars (400 troy ounces), 1 kilogramme bars, and less commonly, 1 gramme (31 troy ounces) 1 Tael and 1 Tola bars.

The use of large gold bars, however, carries a significant risk of counterfeiting as larger bars could be made hollow and filled with a variety of less valuable substances.

Also, gold bars can not be weighed and compared to a previously set value to confirm their authenticity, unlike gold coins.

Coins

Bullion gold coins differ from numismatic coins which are collected for their rarity rather than any intrinsic value of the gold contained.

The use of gold coins for trading is also very popular with over 50 million ounces of Kruggerands, – a type of gold coin – in circulation around the world http://www.coinweek.com/bullion-report/krugerrand-still-famous-bullion-coin/

Sizes of gold bullion coins vary from one tenth of an ounce to two ounce and examples of popular gold bullion coins include the South African Krugerrand, Australian Gold Nugget, Canadian Gold Maple Leaf and the American Gold Eagle.

What Influences The Gold Market

The monetary policy set out by the Federal Reserve is one of the biggest influencers of Gold. Higher interest rates can lower the demand for gold as holding cash can becomes more attractive and in times of low-interest rates, demand for gold can increase as holding gold over cash becomes more attractive.

Six other factors identified by the FOOL include U.S. economic data, supply and demand, inflation, currency movements, ETFs and uncertainty.

Commodities related to gold include:

  • Platinum
  • Silver
  • Aluminium
  • Tin
  • Copper

Popular gold exchanges

London Metal Exchange (LME)

It offers exposure to futures and options of a large variety of metals and commodities

The New York Mercantile Exchange (NYMEX)

It is the world’s largest commodity futures exchange platform, offering a wide variety of products

The Intercontinental Exchange Inc. (ICE)

They operate futures and over the counter contracts through internet marketplaces

Summary: trading gold

Trading Gold futures and Spot gold as a CFD is a popular choice for traders who are looking for a low-cost approach to trading. With a combination of leverage and smaller contract sizes, the required capital to trading gold is minimised as a CFD.


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