How to spread bet on gold

If you’re looking to spread bet on gold, the process itself is straightforward. The challenge is usually not how to place the trade, but how to size it properly and manage risk in a fast-moving market. 

Below is a clear, step-by-step walkthrough of how spread betting on gold works with Pepperstone, and what to think about before placing a trade. 

¹In the UK, spread betting profits are exempt from capital gains tax. Please be aware that tax treatment depends on your individual circumstances, and tax law may be subject to change.

Why traders spread bet on gold 

Gold (XAU/USD) attracts traders for a few key reasons: 

• It’s highly liquid, with tight spreads during active market hours 
• It reacts strongly to macro events like inflation data, interest-rate decisions and geopolitical risk 
• It often behaves differently to equities and indices, making it useful for diversification 

For UK traders, spread betting adds another benefit: any potential profits are currently free from capital gains tax and stamp duty – although please be aware that tax treatment depends on your individual circumstances, and tax law may be subject to change.¹

Step 1: Open the gold instrument (XAU/USD) 

Once logged into your chosen trading platform, search for XAU/USD — the standard symbol for gold priced in US dollars. 

Before placing a trade, choose a timeframe that matches your trading style: 

• Short-term traders often use the 1-minute, 5-minute or 15-minute charts. 
• Swing traders typically look at the 4-hour or daily charts. 

There’s no ‘correct’ timeframe. What matters is consistency and using a view of the market that fits how long you intend to hold the trade. 

Step 2: Decide your trade direction 

Spread betting on gold enables you to trade on both rising and falling prices. 

• If you believe the gold price will rise, you buy 
• If you believe the gold price will fall, you sell 

This flexibility is one reason why derivatives like spread betting are popular, when prices can move sharply in either direction. 

Step 3: Set your position size (£ per point) 

This is where many traders go wrong. With spread betting, you don’t choose a number of contracts. Instead, you choose how much you want to stake per point of movement in the gold price. 

For example: 

• £1 per point means you gain or lose £1 for every point gold moves. 
• £5 per point means you gain or lose £5 per point. 

Gold prices can be highly volatile, particularly around economic data releases. Beginning with smaller positions can help you observe market behaviour while managing risk more effectively. 

Your position size should always reflect: 

• The volatility of gold 
• Your available trading capital 
• The distance to your stop-loss 

Step 4: Add a stop-loss and take-profit 

• Before placing the trade, decide where you’ll exit if the market moves against you — and where you’ll take profit if it moves in your favour. 
• A stop-loss helps limit losses if the trade doesn’t work. 
• A take-profit locks in gains when your target is reached. 

It’s important to consider your stop level carefully against expected volatility, so you might have the chance of reducing the risk of a) losing too much capital and b) being stopped out unnecessarily during normal market fluctuations within a trend. Pepperstone allows stops and limits to be added directly to your entry order across supported platforms, helping you define risk before the trade is live. 

Placing a trade without a stop is not a strategy — it’s hope. 

Step 5: Place the trade and manage it 

Once your direction, position size and risk levels are set, you can open the trade. From here, the key is to maintain discipline: 

• Avoid moving stops emotionally 
• Stick to your original plan 
• Don’t add to losing positions 

Consistent trading outcomes come from repeating good behaviour, not reacting to every price fluctuation. 

Platforms you can use to spread bet on gold 

Pepperstone offers spread betting on gold across multiple platforms, including: 

• TradingView 
• MetaTrader 5 (MT5) 
• MetaTrader 4 (MT4) 
• CTrader 
• The native Pepperstone platform 

Each platform supports advanced charting, risk controls and fast execution, allowing you to trade gold in the way that suits your strategy. 

Spread betting vs CFD trading on gold 

Both spread betting and CFDs enable you to trade gold’s price movements. The key differences are in their mechanics: 

Spread betting 

• Trade in £ per point 
• Potential profits are tax-free in the UK¹
• Simple position-sizing model 

CFD trading 

• Trade contracts rather than points 
• Like-for-like exposure to the underlying makes this product popular for hedging 
• Profits are subject to CGT, although you may be able to offset any losses against your potential profits when submitting your tax return¹

Many traders use both, depending on the market and their objectives. Pepperstone provides access to both products on the same platforms, letting you choose the one that fits your approach. 

Final thoughts on spread betting gold 

Spread betting on gold can offer a potential complement to your portfolio — but it does require respect for volatility and disciplined risk management. 

Focus on: 

• Sensible position sizing 
• Pre-defined stops and targets 
• Trading during times when liquidity is strongest 

When approached with a clear plan, gold can become part of an effective spread betting strategy.