Overnight financing on multi-day gold positions

Gold carries the most awkward swap of any instrument retail traders commonly hold: negative in both
directions, and heavier than most currency pairs. Anyone holding gold for days needs this.

1. Why gold is negative both ways

On a currency pair, swap comes from the interest differential between two currencies — so one side
is positive and the other negative. Gold is not a currency; it is a spot commodity funded in dollars.
The financing cost plus the broker’s margin means
both long and short pay swap at most brokers.

Which means you cannot pick the cheap side as you can on USD/JPY. Holding gold overnight always
costs.

2. The size of it

One lot of gold is 100 ounces. Typical swap runs −$15 to −$45 per lot per night,
depending on the broker and the rate environment. The exact figure is always in the
contract specification on the platform.

3. The Wednesday rule

The spot market settles at T+2. A position held through Wednesday night has to be rolled across the
weekend too, so that night’s swap is charged three times.

A position held Monday to Friday costs not four nights but six.

4. Costing a swing trade

One lot of gold held for two weeks, swap at −$28 a night:

• 14 calendar days, including 2 Wednesdays → 14 + 2 × 2 = 18 charged nights
• 18 × 28 = $504

At current gold prices, $504 on one lot is about
$5 an ounce — price has to move that far your way just to cover the cost of holding.
That figure belongs in your target calculation from the outset.

5. Four ways to reduce it

• Close within the day where the strategy allows — this removes the charge
  entirely.
• Avoid opening on a Wednesday if you only intend to hold one night.
• Cut size and widen the stop rather than holding a large position for days.
• Compare swap across brokers — the gap between cheapest and dearest can be
  twofold.

6. On swap-free accounts

A swap-free account removes the charge, but
usually with one of these conditions attached: a wider spread, a fixed administration fee after a
number of days, or excluded instruments. On gold specifically, many brokers charge a daily
administration fee in place of swap — read the terms before treating it as a free lunch.

This article is for information only and is not investment advice. Conditions and fee levels are published by the brokers and can change at any time — check with the broker you actually use. Leveraged forex and CFD trading carries a high level of risk and can cost you your entire deposit.