Fixed and variable spread in gold trading
A fixed spread stays the same size whatever the market does; a variable spread moves with liquidity, tight in busy hours and wide around news and rollover.
Also called Floating spread, Fixed spread, Variable spread
Fixed and variable spreads are the two ways a platform can price the gap between the bid and the ask. A fixed spread is set in advance and does not change in normal conditions. A variable (floating) spread follows the underlying market and changes from second to second.
How it applies to gold trading
Gold liquidity changes sharply through the day. During the London and New York overlap a variable XAUUSD spread can be very tight, while at the Sunday open or during a CPI release it can widen several times over. A fixed spread hides that variation, so it is usually set wider than the variable spread at busy times to cover the quiet and volatile ones.
Neither is automatically cheaper. A trader who only trades the London and New York sessions may pay less on a variable spread. A trader who enters at awkward hours may prefer the predictability of a fixed one. Some fixed-spread accounts also requote orders when the market moves fast, which is a cost of its own.
Worked example
Example (hypothetical numbers): a variable spread averages $0.25 in the New York session but $1.50 in the first minute after NFP. A fixed spread is $0.45 all day. A trader opening 1 lot ten times a month in the New York session pays about 10 × $0.25 × 100 = $250 on the variable spread and 10 × $0.45 × 100 = $450 on the fixed one.
A common mistake
Comparing only the advertised minimum spread. Look at the average spread during the hours you actually trade, plus any commission and requote behavior.
See also: Bid, ask and spread, Spread widening, Requote, Raw spread account.
Frequently asked questions
Is a fixed spread better for trading gold?
It depends on when you trade. Fixed spreads are predictable but usually wider than variable spreads in busy hours. If you trade the London and New York sessions only, a variable spread is often cheaper overall.
Can a fixed spread change?
In extreme conditions, yes. Many contracts allow fixed spreads to be widened or orders to be requoted during major news or market disruption, so read the terms.