What is the role of leverage in gold trading?

Gold has long been a highly recognized investment tool, not only high value but also an independent asset, now more and more investors involved in gold trading. In the gold investment market, investors have heard more of the rules of one of the leveraged trading, but many investment novices and speculation on gold leverage feel strange.

First, what is the role of speculation gold leverage

Leverage trading, that is, a way of trading with a small amount of money, can reduce the transaction costs of investors and improve the efficiency of capital utilization. Different gold trading methods, there are different trading leverage, the leverage of futures gold is generally between 10 times to 15 times, the leverage of spot gold in about 100 times.

Second, speculation gold leverage is what it means

The so-called leverage, refers to the gold investors according to their own judgment of the future trend of international gold prices, to the trading platform to pay a certain amount of margin, you can buy the whole contract. In other words, it is the use of a small amount of margin will be the investment funds multiplier amplification, multiplier ratio is generally known as the leverage ratio. For example: assuming that the current international gold price of $ 1,500, investors buy a lot of spot gold needs $ 150,000, and in the margin leverage trading system, investors only need to pay $ 1,000 margin, you can have the right to trade $ 150,000.

Of course, is the investment there will be risk, gold trading leverage in reducing investors' transaction costs at the same time will also amplify the transaction risk, but this risk control is mainly in the hands of the investor himself, the investor can according to their own investment willingness and trading skills to properly control the risk, and the reasonable use of trading leverage to obtain a higher return.