IB UK Spot Gold and Spot Silver
PRODUCTS
Trade London Precious and Base Metal Derivatives
The IBKR Advantage
- Commissions start at just 1.5 basis points, or 0.015%
- Overnight financing rates for short positions start at BM + 1.00%
- Gain access to UK spot gold and silver price movements without owning the physical metals.
- Access wholesale pricing without having to trade wholesale quantities
IBKR (UK) Unallocated Gold and Silver
IBKR (UK) OTC derivatives referencing the price movements of physical Gold (XAUUSD) and Silver (XAGUSD) are available to qualifying customers.1
IBKR (UK) Unallocated Gold/Silver are not listed instruments but traded over the counter between qualifying clients and IBKR (UK). Unallocated means that IBKR has a general claim on physical gold held by a bullion dealer, forming the basis for the client contract. Unallocated represents the most popular and straightforward way of trading gold and silver.
IBKR (UK) Unallocated Gold/Silver enable clients to have exposure to price movements of physical gold or silver without owning them outright. Thus, if the price of physical gold or silver traded on the London bullion market rises, clients receive cash from IBKR (UK) and vice versa. London Unallocated Gold/Silver can be bought long or sold short to suit clients’ view of market direction in the future.
IBKR (UK) Unallocated Gold/Silver are marginable products enabling clients to obtain exposure in excess of the cash available in the account. The level of leverage depends on the margin requirement as determined by IBKR (UK) from time to time.
Additional benefits include:
Low, Transparent Commissions and Financing Rates
Commissions start at just 1.5 basis points for Gold and 3 basis points for Silver, and overnight financing rates for leveraged positions start at the benchmark rate + 1.5%, with lower rates available for larger balances.
Short positions incur a borrow fee starting at benchmark + 1%, with lower rates available for larger balances. There is also an Unallocated Carrying Fee of 10 basis points charged for storage. Settlement is T+2.
Efficient Pricing in Accessible Quantities
The London bullion market is a wholesale market. However, IBKR clients have access to its efficient pricing, as quoted by IBKR's liquidity providers, without having to trade in wholesale quantities.
IBKR Unallocated Gold/Silver are quoted units of 1 troy ounce and quoted against USD. IBKR passes through prices from its liquidity providers without widening the spread.
IBKR (UK) OTC Futures on LME Metals
IBKR LME OTC Futures2 provide clients (excluding residents of the US, Canada, Hong Kong, and Israel) synthetic access to the London Metal Exchange, a peer to peer exchange not generally available to nonmember investors.
- Unique Access to Industrial Metals Trading: LME OTC contracts on Aluminium, Copper, Lead, Tin, Nickel and High Grade Zinc access the liquidity of the world's leading metals trading venue.
- Trade highly liquid 3rd Wednesday contracts: 3rd Wednesday contracts provide electronic access to a contract with monthly expiry, like a future. They represent around 65% of open interest on the exchange.
- Transparent Quotes and Executions: IBKR streams quotes from the LME (L2 market data) and does not widen the quote. Every client order is first hedged on exchange and the LME OTC order filled at the price of the hedge.
Understanding the London Precious Metals Market
What is the London Unallocated Market?
The London unallocated gold and silver market is the main way gold and silver are traded around the world. Instead of owning specific bars, investors hold a general claim on a pool of metal. This system is supported by the London Bullion Market Association (LBMA), which sets rules for quality, pricing, and settlement. Most gold and silver trades are handled this way because it is faster and more cost-effective than dealing with physical metal.
How Does Someone Participate in the London Unallocated Market?
To participate, you typically open an unallocated account through a bank or broker that is a member of the LBMA. These accounts give you ownership rights to a portion of a larger pool of gold or silver. You do not own specific bars, but you can trade quickly and in large amounts.
Interactive Brokers offers access to the London precious metals market through unallocated gold and silver trading. Clients can buy or sell spot metals directly from their account using the IBKR platform, with competitive pricing and low commissions.
What Are the Risks and Rewards of the London Unallocated Market?
The unallocated market offers many advantages, especially for active traders and institutional investors, but it also comes with some important risks to consider.
Rewards
- High liquidity, which means you can buy and sell easily
- Lower costs compared to physical storage
- Access to global spot pricing
Risks
- You do not own specific bars, just a claim on metal
- If the provider of the account fails, you may lose part or all of your investment
- Cannot easily take physical delivery unless you convert to an allocated account and pay additional fees
Spot Gold and Spot Silver Facts
Troy Ounces
A Troy Ounce is the traditional unit of weight used for precious metals. The term derives from the French town of Troyes, where this unit was first used in the Middle Ages.
One troy ounce is equal to 1.0971428 ounces avoirdupois. In the bullion market, all references to ounces mean troy ounces.
Loco London Pricing
The Loco London Spot Price is the basis for virtually all transactions in gold and silver in London. It is a quotation made by dealers based on US dollars per fine ounce for gold and silver. IBKR's liquidity providers provide quotes based on this price. Settlement is (T+2).
Unallocated Metal Trading
Loco London Gold and Silver are considered "unallocated", the most popular and straightforward way to trade gold and silver. Credit balances are backed by the general stock of the bullion dealer, and debit balances represent the indebtedness of the trader to the bullion dealer. In other words, a position in gold or silver is not an entitlement to specific bars of gold or silver.
Understanding OTC Futures on LME Metals
What Are London OTC Futures on LME Metals?
London OTC futures on LME metals are private contracts that track prices on the London Metal Exchange (LME). These contracts allow investors to trade base metals like copper, aluminum, zinc, and nickel without going directly through the exchange. OTC means over-the-counter, so the terms of the trade are negotiated between the buyer and seller. The contracts follow LME pricing and are often used by companies to protect against metal price changes.
How Does Someone Buy OTC Futures on LME Metals?
To buy OTC futures, you need to work with a financial institution or broker that offers access to LME-linked contracts. These contracts can be customized in terms of size, maturity, and currency.
Interactive Brokers gives qualified clients access to metal futures and over-the-counter contracts based on LME prices. You can trade these products through the IBKR platform, using tools to manage your exposure to metal prices in a flexible and efficient way.
What Are the Risks and Rewards of London OTC Futures on LME Metals?
OTC futures based on LME metals give traders flexibility and access to global benchmarks, but they also come with important tradeoffs depending on how the contracts are structured.
Rewards
- Can be customized to fit specific hedging or investing needs
- Follow LME prices closely for accurate exposure
- May offer easier access than trading directly on the LME
Risks
- Some OTC contracts are not cleared, which means there is counterparty risk
- They may be harder to exit than exchange-traded futures
- You may not receive physical delivery unless agreed in the contract
Spot Gold and Spot Silver Facts
Troy Ounces
A Troy Ounce is the traditional unit of weight used for precious metals. The term derives from the French town of Troyes, where this unit was first used in the Middle Ages.
One troy ounce is equal to 1.0971428 ounces avoirdupois. In the bullion market, all references to ounces mean troy ounces.
Loco London Pricing
The Loco London Spot Price is the basis for virtually all transactions in gold and silver in London. It is a quotation made by dealers based on US dollars per fine ounce for gold and silver. IBKR's liquidity providers provide quotes based on this price. Settlement is (T+2).
Unallocated Metal Trading
Loco London Gold and Silver are considered "unallocated", the most popular and straightforward way to trade gold and silver. Credit balances are backed by the general stock of the bullion dealer, and debit balances represent the indebtedness of the trader to the bullion dealer. In other words, a position in gold or silver is not an entitlement to specific bars of gold or silver.
Interactive Brokers’ Education and Resources for Metals
Traders' Academy
Futures Fundamental Analysis
Lesson Overview: Fundamental Analysis and Metals Futures
In this lesson, you’ll explore how fundamental analysts evaluate the metals futures market by examining both investment and industrial demand. You’ll learn how economic indicators like inflation, GDP, and interest rates influence the price of metals such as gold, silver, and copper. By the end of the lesson, you’ll understand how analysts weigh these factors to form trading decisions in the metals market.
Learn About Fundamentals and Metal Futures
Micro Metal Products
Are you looking for the opportunity to trade Gold or Silver futures? Would smaller size contracts suit your trading strategies or upfront capital availability better? Micro Gold and Micro Silver futures contracts may be the alternative for you.
Spot Gold and Spot Silver Facts
Troy Ounces
A Troy Ounce is the traditional unit of weight used for precious metals. The term derives from the French town of Troyes, where this unit was first used in the Middle Ages.
One troy ounce is equal to 1.0971428 ounces avoirdupois. In the bullion market, all references to ounces mean troy ounces.
Loco London Pricing
The Loco London Spot Price is the basis for virtually all transactions in gold and silver in London. It is a quotation made by dealers based on US dollars per fine ounce for gold and silver. IBKR's liquidity providers provide quotes based on this price. Settlement is (T+2).
Unallocated Metal Trading
Loco London Gold and Silver are considered "unallocated", the most popular and straightforward way to trade gold and silver. Credit balances are backed by the general stock of the bullion dealer, and debit balances represent the indebtedness of the trader to the bullion dealer. In other words, a position in gold or silver is not an entitlement to specific bars of gold or silver.
Risk Warnings
- IBKR (UK) OTC derivatives referencing the price movement of physical gold, silver or base metals are offered by Interactive Broker (U.K.) Limited, which is authorised and regulated by the Financial Conduct Authority ("FCA"), register number 208159.
- IBKR (UK) gold, silver and base metal trading is not suitable for all investors. Due to the leveraged nature of these products, your losses may exceed your initial investment and may cause your account to go into negative balance.
- IBKR (UK) is a member of the Financial Services Compensation Scheme. This means that if IBKR (UK) is unable to pay out, retail investors and certain other investors may be eligible to make a claim of up to £85,000 but may otherwise lose all of their initial investment and any returns generated on their initial investment.
Start trading like a professional today!
Open an AccountDisclosures
- IBKR (UK) Gold and Silver trading is available to customers who are not legal residents of the U.S., Canada, Australia, New Zealand, Hong Kong, Japan or Singapore.
- The LME metal futures are OTC derivative contracts with IBKR (UK) as the counterparty. The UK Metal futures reference the corresponding LME future in terms of price, lot size, type and specification but are themselves not registered contracts. Physical delivery is not permitted.
Eligible customers must apply for Metals trading permissions via the Trading Permissions page in Client Portal.