How to trade Gold and Silver on LMFX MT4?

How to trade Gold and Silver with LMFX?

To start trading Gold and Silver with LMFX, you just need to open an account for Forex and CFD trading.

You can open an account with LMFX from this page.

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On LMFX MT4 trading platform, you can trade Gold and Silver trading pairs that are XAGEUR, XAGUSD, XAUEUR, and XAUUSD.

Trading Gold and Silver online

Trade gold and silver CFDs through LMFX’s MetaTrader 4 platform. You can enjoy the industry’s lowest spreads from the primary liquidity provider to quickly execute your Expert Advisors.

A rare earth metal, gold sits at the top of the precious metals group. It has been sought after, mined and traded for thousands of years and, like oil, been at the center of wars.

With a limited supply it is always likely to keep its value. Investors have used it as a hedge against inflation in the past, and now seemingly using gold to hedge against negative interest rates.

With a limited supply it is a store of value and, for such a pricey metal, it is surprisingly versatile, having been used as money, a store of value, jewelry and electronics (among others).

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Features of Gold and Silver markets

Supply and Demand

All markets are subject to forces of supply and demand and gold is no different. Long-term investors monitor gold demand of countries and central banks, as they tend to buy in size. The World Gold Council releases a quarterly report breaking down levels of supply and demand for such groups, along with jewelry, ETFs, coins and technology demand.

USD

It is only natural to expect an inverted correlation between gold and USD, as spot gold is priced in dollar. Ideally traders would like to see a weaker USD to trade gold long (and visa-versa). That said, no correlation is fixed and there are occasions where both the USD and gold and move in tandem, as both markets are considered safe-haven assets.

Risk-Sentiment

There are several markets which attract money flows during times of risk-off. Gold is just one of them. If headlines rock markets enough to see equities fall, bonds rise and JPY and CHF attract inflows, the chances are gold will also appreciate. The reverse is also true; once risk-appetite returns, gold often weakens to some degree.

Economic Data

If macro-economic data suggests global growth is softening, gold could appreciate as investors become defensive. Whether it is a short lived reaction or the start of a new trend depends on the importance of the data. Ultimately this intertwines with risk sentiment; if a slew of macro data softens, it could trigger a risk-off reaction and support gold as a secondary reaction.

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Advantages of Trading Gold CFDs with LMFX

Trade Long and Short

Being able to trade in both bullish and bearish markets is not always possible with underlying markets. Not all brokers will lend stock to short shares, and futures can prevent traders from entering or exiting the market. With CFDs you are free to speculate on the market’s direction.

Fast Execution

Trading physical gold or even ETFs come with delays. Bypass these bottlenecks with gold CFDs, as entry and exit are almost instant.

Trade Risk Sentiment:

As gold is considered a safe-haven asset, it can attract money flows during times of uncertainty. This makes gold CFDs an excellent vehicle of choice to trade risk sentiment as sentiment oscillates between bouts of risk-off and risk-on.

Hedge Physical Gold, an ETF or Gold Stocks

A investor can use CFDs to hedge out market risk for a relatively small cost compared with the underling market they hold. Hedging is the process of opening a trade in the opposite direction (usually of equal value) to their original position.

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How to hedge funds with Gold?

Here are just a few examples:

If an investor holds physical gold, they are effectively long the gold market. But if they remain bullish on gold overall yet are concerned gold may correct over the near-term, they could opt to short gold CFDs of equivalent value to their physical gold holdings. In doing so, if prices fall then the profits on their short gold CFD offset the losses of their physical position. Of course, if gold prices rise and their physical gold appreciates in value, the investor loses money on the hedged gold CFD, so could then choose to close the hedge.

Taking the same principles as above, traders can hedge ETFs or even a portfolio of stock CFDs. Perhaps they are short a group of US gold miners but are concerned that prices may correct higher, they could open a long CFD to hedge out the market risk.

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Why Trade Gold with LMFX?

Competitive spreads

Trade tight spreads via top-tier liquidity providers at LMFX.

Low Transaction Costs

By offering tight spreads, competitive swap rates and low (or now) commission, LMFX endeavors to keep your trading costs as low as possible.

Up 500:1 Leverage

With 100:1 leverage and partial contract trading, you can trade as little as one ounce of gold for a fraction of the cost of the physical market.

Fully Hedge Your CFD Trade

If you open a gold CFD of equal value in the opposite direction, your margin requirements will be zero for the two trades, freeing up capital for other opportunities whilst you hedge your gold CFD.

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Conditions of LMFX’s all trading account types

LMFX offers 3 trading account types for its traders.

See the table below for the comparison of trading conditions.

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