Spreads, Swaps and Commissions: The Real Cost of Trading Gold
Every trade starts slightly negative. Before gold moves a single cent in your favour, you have already paid the broker. On their own, these costs look tiny. Over hundreds of trades, they can decide whether a strategy makes or loses money. Here is how each cost works on gold.
The spread
Every symbol has two prices: the bid (where you sell) and the ask (where you buy). The difference is the spread. If gold shows 4,150.00 / 4,150.25, the spread is 0.25.
When you buy, you enter at the ask and your position is valued at the bid, so you start 0.25 down. On 0.10 lots (10 ounces), that is 0.25 × 10 = $2.50 per trade.
Gold spreads are not fixed. They are tightest during the London and New York sessions and widen during the Asian session, around rollover (late evening in Europe) and sharply around major news.
Tip: MetaTrader charts show the bid price by default. Enable "Show Ask line" in chart settings so you can see where buy orders will fill.
Commission
Some account types, often called raw, ECN or zero-spread accounts, offer very tight spreads but charge a commission per lot. A typical structure is a fixed amount per lot per side. For example, $3.50 per lot each way means $7 to open and close 1.00 lot, or $0.70 for 0.10 lots.
To compare accounts, add both together: a standard account with a 0.30 spread versus a raw account with a 0.10 spread plus commission. Work out the total cost per lot for each before choosing.
Swap (overnight financing)
If you hold a position past the broker's daily rollover, you pay or receive a swap. On gold, swaps for both buys and sells are usually negative, meaning you pay to hold either direction overnight.
- Swap is shown in points or money per lot per night in the symbol specification in MT5.
- Most brokers charge triple swap on one night of the week (often Wednesday) to cover the weekend.
- Some brokers offer swap-free (Islamic) accounts, which may charge a fixed fee instead.
For intraday traders, swap usually does not matter. For trades held for days or weeks, it can add up to a meaningful cost.
Slippage
Slippage is the difference between the price you expected and the price you got. It happens in fast markets, especially around news. It can work in your favour or against you, but stop losses during spikes usually slip against you.
Worked example
A 0.10 lot gold buy, held for two nights, closed at a 5.00 profit:
| Item | Amount |
|---|---|
| Gross profit (5.00 × 10 oz) | +$50.00 |
| Spread (0.25 × 10 oz) | −$2.50 |
| Swap (example: −$1.50 per night × 2) | −$3.00 |
| Net profit | +$44.50 |
That is 11% of the gross profit gone to costs. On smaller targets, the share is much higher, which is why tiny scalping targets are hard to make profitable. See risk-to-reward ratio explained.
How to keep costs low
- Trade during the most liquid sessions. See the best time to trade gold.
- Avoid entering right before news or around rollover.
- Aim for targets large enough that costs are a small fraction of them.
- Compare total cost per lot between account types, not just the advertised spread.
- Close intraday trades before rollover unless you plan to hold them.
This article is general education, not financial advice. Trading involves substantial risk, and you can lose more than you expect. Only trade with money you can afford to lose.