With City Index you can trade CFDs on a wide range of precious metals. With no commission and margins from 2.5%, access live prices on gold, silver, platinum and palladium.
Metals CFD Example:Let's say our gold CFD price is 1250.1/1250.5 (sell price/buy price).
You think that gold prices are currently undervalued at these levels and decide to buy (go long) 20 CFDs at 1250.5 (buy price).
You were right: Over the coming days, the price of gold surges on increasing demand for the precious metal. When prices reach 1280.5, you decide to cash in your profits. We are now quoting a gold CFD price of 1280.5/1280.9. To close your trade, you now sell 20 CFDs at 1280.5.
Result: You bought at 1250.5 and sold at 1280.5, representing a 300-point movement in your favour, which at a trade size of 20 CFDs, nets you a profit of $6,000 (1280.5 – 1250.5 x 20 CFDs) (note gold CFD trade per is 0.1).
Alternative scenario: If however, you were wrong and gold prices had fallen to 1220.5, you would net a $6,000 loss (1250.5 - 1220.5 x 20 CFDs).
You think gold prices are overvalued at these levels and decide to sell (go short) 20 CFDs at 1250.1 (sell price).
You were right: Over the coming days, some increased appetite for risk convinces investors to move money out of gold, causing gold prices to fall. When the prices reach 1220.1, you decide to cash in your profits. We are now quoting a gold CFD price of 1219.7/1220.1. To close your trade, you now buy back 20 CFDs at 1220.1.
Result: You sold at 1250.1 and bought back at 1220.1, representing a 300-point movement in your favour, which at a trade size of 20 CFDs, nets you a profit of $6,000 (1250.1 – 1220.1 x 20 CFDs) (note gold CFD trade per is 0.1).
Alternative scenario: If however, you were wrong and prices had risen to 1280.1, you would net a $6,000 loss (1280.1 - 1250.1 x 20 CFDs).
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City Index is a trading name of GAIN Capital Australia Pty Ltd.
The material provided herein is general in nature and does not take into account your objectives, financial situation or needs. While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments. GAIN Capital recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets. It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com.au, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. GAIN Capital Australia Pty Ltd (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.