As of August 12, Admiral Markets has reduced the minimum contract size for the Gold CFD from 0.1 lots to 0.01 lots.
With leverage of up to 1:20 for Retail clients, this reduces the retail margin requirements for minimum contract sizes by ten times, meaning anyone can start trading gold.
The history of gold
Gold has been highly valued for thousands of years for coins, jewellery and art.
When it comes to trading gold, the first big leap forward was in 1792 when the US put the dollar on the gold and silver standard. The precious metals continued to back the US dollar until 1971, when President Richard Nixon removed the USD from the gold standard - a move that had a significant impact on gold price around the world.
On January 21, 1980, gold price skyrocketed from USD35 an ounce to USD850 an ounce (in today's dollars, that would be USD2,398.21). The price then dipped for the next 20 years, hitting a low of USD377.18 in 2001, before climbing for the next decade until it hit a peak of USD2,064.08 in 2011.
Since 2013, the price of gold has been range bound between USD1,527 and $1,145.
What influences the price of gold?
The price of gold is influenced by a range of macroeconomic factors, including:
- Supply and demand: As with any instrument, when the demand for gold outstrips the supply, prices increase. When supply is higher than the demand, prices fall.
- Interest rates: As interest rates rise, the gold price (which earns no interest), has a tendency to fall, and vice-versa. This is why the gold price can be correlated to central banks via the monetary policy decisions made by them, which are related to interest rates.
- Economic performance: As gold and other precious metals are often used as hedges against inflation, deflation and currency devaluation, economic performance regularly influences the price of gold, with the price increasing during times of poor economic performance (like the global financial crisis), and decreasing when the economy is performing well.
- National emergency: Linked to the previous point is war, invasions, national disasters and other national emergencies. When people fear that banks will fail, they will often hoard gold rather than keeping their funds in cash.
What are the benefits of trading gold?
Because the price of gold regularly responds to changes in the global markets, it is a highly volatile trading instrument, which gives savvy traders many opportunities to successfully trade the yellow metal.
With CFDs, traders can benefit from price movements in both directions, by trading gold both long and short. Unsurprisingly, this makes gold one of the world's most popular markets, with is accounting for 9.19% of Admiral Markets' total global trading volume (based on data from August 1 to August 12, 2019).
With all of these benefits, it's easy to see why gold is one of Admiral Markets' most popular instruments:
- Low typical spreads: From just 16-22 pips in peak trading hours.
- Magnify your returns: With leverage of up to 1:20 for Retail clients, and 1:500 for Professional clients, you can amplify your trading profits (and losses).
- NO commissions: You just pay the spread!
- The world's favourite trading software: Trade gold on MetaTrader 4 and MetaTrader 5, with our exclusive Supreme Edition.
- Diversify your portfolio: Gold can be used as a safe haven investment to hedge against inflation and stock devaluation.
Simply start trading gold to benefit from our new micro lots today!