Spot Gold is one of ICDX gold contracts which has no maturity and is rolled over each day. Rollover means that an investor’s position is extended at the end of the trading day without settling. This means positions will be opened until they close their position. In addition, settlement is done in cash so it provides investors simplicity in owning gold.
Spot Gold vs Traditional Gold
Compared to traditional trading in gold, our spot gold contracts provide flexibility for investors in terms of market access and gold storage. With spot gold contracts, we offer an easy access to gold without having the concern of storing the actual gold. ICDX Spot Gold markets are also open nearly 24 hour.
Source of Superior Liquidity
Everyone can trade spot gold, from retail investors to institutional investors. Retail investors benefit from easily accessible gold markets due to margin trading and a liquid market. When prices are compared between spot gold market and domestic gold market, spot prices are considerably lower than domestic prices due to no minting fee. For Institutional investors, benefit from gold comes in the form of diversification. Although gold by itself has a high volatility similar to stock composite index, its low correlation against other assets enables risk management in an investment portfolio. Combined with stocks, gold is able to reduce volatility while maintaining the portfolio return profile. In addition, gold has been widely known as a hedge against inflation and crisis. Based on historical data, in these last financial crisis since 2008 (Lehman, Greek Debt, and Oil) gold had been able to withstand the crisis impact and to preserve investors capital.