Gold CFDs (contracts for difference) are leveraged securities that require a small margin requirement. When buying gold at the spot price, a person does not hold the underlying asset (as is the case with spread betting), but agrees to trade the value difference between the commencement and closure of the position. When there is the potential for profit in gold trading, there is also the potential for loss.

Gold CFDs, or Contracts for Difference on gold, are financial derivatives that enable traders to speculate on the price movements of gold without owning the physical metal. CFDs are agreements between a buyer and a seller to exchange the difference in the asset's value from the time the contract is opened to when it is closed. In the case of gold CFDs, investors can capitalize on both rising and falling gold prices, aiming to profit from market fluctuations.

These instruments provide flexibility as they allow traders to leverage their positions, amplifying potential gains or losses. Gold CFDs are traded on various online platforms, making them accessible to a wide range of investors. Unlike traditional gold trading, CFDs don't involve taking ownership of the physical commodity, making them a popular choice for those seeking exposure to gold's price movements without the complexities of physical ownership and storage. However, it's important to note that CFD trading carries risks, and investors should carefully consider their risk tolerance and market knowledge before engaging in such transactions.