Path A · Spot XAU/USD · Module A3
A1 showed you the chain your price travels down. A2 showed you the position you hold. This module follows the money the other way — every cost the position carries, where on the chain it is added, and why two traders at the same broker can pay wildly different amounts for the same gold.
What you'll learn
The shape of it
Most explanations of trading costs hand you a list — spread, commission, swap — as if they were line items on a receipt. That misses the thing that actually matters. Each of these costs is added at a specific place on the chain you already know, and where it sits tells you what it is, who collects it, and whether you can avoid it.
There are three. The spread is built into the quote before it ever reaches your screen — it's the gap between the price you buy at and the price you sell at, and you pay it the instant you open. Commission, when it exists, is charged by the broker at the moment it fills your order — a flat fee bolted onto the execution. The swap is applied once a day at rollover, for as long as you hold the position open overnight. Spread and commission are costs of trading; the swap is a cost of holding. Keep that distinction — and keep one more thing in reserve, because it's the surprise of the module: the swap, the one nobody talks about, is usually the largest of the three by a wide margin.
Below is the A1 chain again, annotated this time not with how the price is built but with where each cost lands on it.
Where each cost is added
Wholesale market
COMEX-anchored spot, aggregated up the chain. A genuine bid and ask exist here — but already with a small wholesale spread.
Your screen
You see a bid and an ask. The gap between them is already the spread. You buy at the ask, you'd sell at the bid — so you start every trade slightly behind.
Your broker
Fills the order. If the position is still open at rollover, the broker also applies the swap below.
Spread is added on the way down, before the quote reaches you. Commission, if any, is added by the broker as it fills you. The swap is added later, and repeatedly, for as long as you hold. Read top to bottom and you have the full cost of the position in the order you actually incur it.
The cost you always pay
The spread is the difference between the price you can buy at (the ask) and the price you can sell at (the bid), at the same instant. It is the most basic cost of the instrument, and on any single trade it is unavoidable: the moment you open a position you are down by the spread, because you bought at the ask and would have to sell back at the lower bid. Close immediately and that gap is your loss. Nothing has to move against you for the spread to cost you — it is the entry fee for being in the trade at all.
Talk about it the way traders actually do: in points — cents of gold price. A2 fixed the point as a one-cent move, worth $1 on a standard lot. Nobody serious quotes gold spread in "pips"; you'll hear "a five-point spread," "twenty cents," and that's the language to use. As an opening anchor: at the tightest, raw-pricing end, a good broker runs a gold spread around 5 points outside news — $5 a lot to open. That figure climbs once a broker builds its pay into the spread instead of charging commission, which is the account-type split we get to next; what counts as a fair number depends on which kind of account you're on. Either way, spread is the first place a broker's quality shows up, and we put hard cheap-average-expensive numbers on it once the account types are on the table.
The spread is not fixed. It is tightest when the market is deep and busy — the London–New York overlap that F5 marked as the high-liquidity window — and it widens, sometimes violently, when liquidity thins: the late-session lull, the weekend gap, and above all the seconds around a major data release. The mechanism is the one from A1: your broker streams a marked-up version of the wholesale quote, and when the wholesale market itself goes thin and jumpy, the broker widens its markup to protect itself. So the spread is largest at exactly the moments retail traders are most tempted to trade — the news spike, the breakout — which is one reason trading the news is more expensive than it looks.
The same cost, repackaged
Brokers present a menu of account types — Standard, Raw, ECN, Zero, Pro — and dress them up as different products for different traders. Strip the marketing away and almost all of them are answering one small question: do you want your cost in the spread, or in a commission? That's it. The gold underneath is identical; only the billing changes.
Standard account
Cost lives in the spread
Raw / ECN / Zero account
Cost lives in a commission
To compare them honestly you add the two pieces together into one all-in cost per round turn, and the industry-standard relationship is tighter than the marketing suggests. The convention works like this: take the raw spread, and a standard account adds about 10 points on top of it as the broker's pay, with no commission; a raw account leaves the spread raw and charges roughly $7 a lot instead — about 7 points' worth. So the standard account is only around 3 points (about $3 a lot) more expensive than the raw account, all-in. The raw account does win, but by that slim margin — not the dramatic gap "spreads from zero!" implies. Both the standard account's "no commission!" and the raw account's "raw spreads!" are true and both incomplete; the difference between them is three points.
That three-point rule assumes the raw account actually gives you raw gold pricing — and not all of them do. Here's the common case: some brokers only run the raw-spread-plus-commission model on forex, and on gold the raw account simply shows the standard spread with no commission at all. The Razor-style account charges its per-lot commission on FX pairs but not on gold, so gold on that account is just standard pricing — the identical spread in both columns, and nothing added on top. You're not penalised; you just don't get any raw-account advantage on gold, because the raw model doesn't extend to it. The lesson is narrower than "raw is always cheaper": don't assume the forex behaviour carries across. Pull up the gold row specifically, check whether the raw spread is genuinely tighter than the standard spread for XAU/USD, and whether a commission even applies. The all-in rule holds — you just apply it instrument by instrument, not account-wide.
The label on the account is marketing. The all-in cost per round turn is the fact. Account selection in A5 leans on exactly this: once you can read the real cost, the broker's tiering stops being a menu and becomes arithmetic.
A benchmark to judge by
Numbers only mean something against a reference. Here is the industry's rough shape for the cost of trading gold — the all-in spread-plus-commission to open and close one standard lot, round turn. Use it to place any broker you're shown: a quote near the cheap column is a genuinely competitive broker; the average column is most of the market; the expensive column is where you're being overcharged, and should ask why.
Two cautions on reading this. First, it's the cost of trading — the swap, the cost of holding, runs on a different scale entirely, and one ugly long swap can dwarf any saving you made on a tight spread, which is the next section. Second, a single advertised number isn't the whole story: a broker can show a tight headline spread and then widen it hard on news, or stack other fees around it. The benchmark places the honest number; reading whether the number stays honest is the broker-choice problem A5 takes on directly.
And these bands shift with the market itself. They reflect ordinary conditions; when gold is liquid and trending hard, spreads compress — through the run toward $6,000 and the daily record highs, raw gold spreads were seen as tight as 5 points. The benchmark is a guide to read against, not a fixed law.
The cost A2 set aside — and the biggest number of the three
A2 left one cost on the table deliberately: the single asymmetry between holding long and holding short. Here it is — and it turns out to be the most important number in this module. When you hold a position past the daily rollover, about 5pm New York time, the broker applies the swap. Most explanations stop at calling it an "overnight financing fee," as if it were simply interest on borrowed money. That's wrong, and the error hides what makes the swap interesting.
A swap is an interest-rate differential — the gap between the rate on what you're effectively long and the rate on what you're effectively short — plus the broker's markup. On a normal currency pair you hold one currency against another and the swap reflects the rate gap between them. Gold isn't an interest-bearing asset, which is exactly why its swap behaves oddly: rather than a clean rate differential, gold's swap is driven by gold lease and borrowing rates plus the broker's adjustment, and it moves around far more than interest rates alone would explain. And it arrives the same way the spread does — the broker has its own swap to pay its liquidity provider upstream, then passes it on to you with a markup layered on top. The practical upshot is the thing the "financing fee" framing obscures: the swap has a sign. A long position is normally charged; a short position is very commonly paid — you receive swap for holding it overnight. That's not a glitch; it's a standing feature of gold, and some traders hold shorts partly to collect it.
Two things about the swap matter before we get to its size:
Long and short aren't mirror images
This is the asymmetry A2 flagged and handed here. The charge on a long and the credit-or-charge on a short are set separately and rarely match. It's normal to be charged heavily to hold a long while being paid to hold a short — and the two figures can both move week to week, because they track gold lending conditions and the broker's markup, not a fixed rate.
The weekend is charged on a weekday
Markets close for the weekend but the swap still accrues across it. To cover it, brokers triple the swap on one day a week — Wednesday for gold and forex, because a position held past Wednesday settles Friday and so carries Saturday and Sunday. Hold through Wednesday's rollover and the swap is three times a normal night, which ambushes traders who only ever glance at the single-night figure.
Now the part nobody puts in the brochure. The swap isn't a rounding error alongside the spread and commission — it's routinely the largest number on the position by a wide margin, and unlike the spread and commission it has a direction. It's not simply a cost; it's a nightly cashflow that flows out of your account on one side of the market and, often, into it on the other. Real recent figures make the scale plain. Through long stretches of the past year a one-lot position has carried roughly −80 points a night on the long (about −$80, charged to you) and +40 points a night on the short (about +$40, paid to you). Set that −$80 night against the trading costs from earlier:
One night's long swap vs the costs traders actually watch
Per standard lot. One ordinary night on the long runs around ten times a full round-turn commission and roughly fifteen times a tight spread — but note the sign: the same night pays the short side. The spread you pay once to enter; the swap lands every night you stay, in whichever direction your position sits.
The nightly figure hides how large this gets, so carry it out to a full year on one standard lot held the whole time. Use 365 nights — the swap accrues every calendar day, with the weekend collected through the triple-swap day:
One standard lot, held a year, at −80 / +40 points a night
Long position
−$80/ night
−$80 × 365 nights
−$29,200/ year
You pay this to hold — and it's measured against the wrong number if you measure it against the position's size. The trader didn't put down $420,000; they put down a few thousand in margin. Against that, −$29,200 a year is many times the money actually at risk — the swap alone can erase the account before the gold price does anything at all.
Short position
+$40/ night
+$40 × 365 nights
+$14,600/ year
You're paid this to hold. A short carried all year collects swap as income — the mirror image of the long's bleed, and the reason carry cuts both ways.
These are illustrative figures at one snapshot of rates; the real numbers move, and either side can shrink, swell, or flip sign. But the shape holds: on gold the swap is rarely small, and which way it runs depends entirely on which side of the market you're on.
That reframes everything. A scalper opening and closing inside the day never touches swap and is right to obsess over spread. But the moment you hold, the swap becomes the dominant line on the position — a heavy drag if you're long, a steady credit if you're short. This is the structural reason spot gold via CFD is built for short holds rather than buy-and-hold on the long side: hold a long for months and the swap can quietly cost more than the move you were waiting for. It's also one of the sharpest differences from gold futures, where there's no overnight swap at all because the cost of carry is already baked into the contract's price and its expiry. F8 drew that line between the two paths; the swap is a large part of the mechanical reason it falls where it does.
Which cost actually bites
Put the three costs together and a pattern appears that decides how the instrument should be traded. Spread and commission are paid per round turn — every time you open and close, regardless of how briefly you held. The swap is paid per night held — regardless of how few times you trade. The two pull in opposite directions, and your style determines which one is quietly draining the account.
The intraday trader
Bled by spread + commission
Opens and closes inside the day, so never pays a swap. But every round turn pays the spread and the commission again. Trade ten times a day and you pay the entry cost ten times — the spread is the tax on frequency. Overtrading dies here, one spread at a time.
The position holder
Ruled by the swap
Trades rarely, so the spread is almost irrelevant — paid once and forgotten. But every night the position stays open, the swap lands again, and triples once a week. Held long, it bleeds and can dwarf everything else combined; held short, it can quietly pay you. Either way the swap, not the spread, is the number that decides what holding costs — or earns.
There is no cost-free way to hold this instrument — only a choice of which cost you'd rather pay. The lesson isn't "trade less" or "hold less"; it's that the cost structure of XAU/USD is built to reward short, deliberate holds and to punish both hyperactivity and long carry. Knowing which cost your style incurs is the difference between a cost you planned for and one that surprises you on the statement. When you reach How to Trade, this is the floor under every expectancy calculation: your edge has to clear your costs before it clears anything else.
Where the real numbers live
Everything in this module — contract size, point value, spread, commission, the swap and its triple day — is set by your broker, for your account type, in one place: the XAU/USD contract specification. You don't have to hunt the website for it; it's built into the platform. In MT4 or MT5, right-click the gold symbol in the Market Watch window and choose Specification, and the whole sheet opens. Almost no new trader looks at it, yet it replaces every "typical" figure in this module with the actual numbers you will be charged.
When you open it, these are the lines that decide your costs:
Two traders at the same broker can read this page and find different numbers, because the account type changes the spread-versus-commission split and sometimes the swap too. The figures in this module are realistic shapes; the contract specs are the truth for your account. Several of these lines deserve a closer look than a cost module can give them — what floating spread does to a stop, how the daily break interacts with pending orders, how margin requirements shift with jurisdiction — and we return to them as they come up across the rest of Path A. For now, the habit is the takeaway: before you fund an account, open the XAU/USD contract specs and read the swap lines first.
Carry this into A4