What is the margin for trading spot gold and silver?

Asked 5 years ago

How does one calculate the margin for trading gold and silver? I understand that it's a very volatile market, and one would need to be precise and know what you're doing. Any guidance would be appreciated. :)

Gold Silver Spot gold Spot silver

Andia Rispah Igobwa

Thursday, August 12, 2021

The margin for trading spot gold and silver is typically 25% to 35%. It means that to trade $1,000 worth of gold and silver at a 25% margin (typical for most bullion dealers), you would have to exchange assets worth a minimum of $2,500. 
Most other commodities are traded on the 5% to 7%; this is one reason why investing in physical metals can be advantageous. 
The difference between that usual rate and the higher margins on physical metals reflects the unique characteristics of these assets. For example, they need more financing than digital assets or derivatives because they are tangible items with storage costs. 
And while it's not as simple as this sounds since there's no such thing as a universal spot price for metals (see below), it explains the difference.