LemonTrades
TL;DR
- US retail traders can’t legally trade leveraged spot XAU/USD; it’s been off-limits since 2011.
- The legal routes are micro gold futures, full gold futures, gold ETFs and physical gold.
- Futures get 60/40 tax treatment; ETFs and physical gold are taxed as collectibles.
- Follow gold on LemonTrades and the desk tells you what moved it, and why, within seconds: breaking news, sharp moves with the likely cause, and a morning brief.
Search for XAU/USD and you’ll find hundreds of brokers offering it. Almost none of them can legally take US clients. Here’s why, and how Americans actually trade gold.
Why you can’t trade spot XAU/USD in the US
Since 2011, after the Dodd-Frank Act, US retail forex dealers haven’t been allowed to offer leveraged spot precious metals, gold or silver against the dollar, to ordinary traders. Leveraged gold trading for retail clients has to happen on a regulated exchange, as futures. So US forex brokers offer currency pairs but not XAU/USD, and CFDs aren’t allowed for US retail traders at all.
Offshore brokers that sign up US clients for gold CFDs aren’t registered with US regulators. If something goes wrong, you have little protection. The CFTC keeps a list of firms that act without registering, and you can check any firm in the NFA’s free BASIC database.
The legal ways to trade gold in the US
1. Gold futures (the closest thing to XAU/USD)
Gold futures trade on COMEX almost around the clock, with leverage and tight spreads, so they behave a lot like XAU/USD. Micro gold (MGC) is 10 ounces: a $1 move in gold is $10 per contract. The full contract, GC, is 100 ounces. You need an account with a US futures broker, and you’ll roll to the next contract before each one expires.
2. Gold ETFs
Funds like GLD, IAU and GLDM hold gold bars and trade like stocks at any US broker. No leverage unless you use margin or options, and only during stock market hours. See the best gold ETFs, compared.
3. Options on gold ETFs or futures
Options on GLD or on gold futures give leverage with a defined maximum loss when you buy them. They take more learning.
4. Physical gold
Coins and bars from a dealer, if you want to own the metal. Not for trading: you pay a premium to buy and get a bit under spot to sell. See our guide to gold bullion.
5. Gold mining stocks
Shares in miners like Newmont, or ETFs like GDX. They follow gold, plus company risk. Live prices on our gold stock price page.
How they’re taxed
- Futures: the “60/40” rule. 60% of gains are taxed as long-term and 40% as short-term, however long you held them.
- Gold ETFs and physical gold: taxed as collectibles, with long-term gains at up to 28%.
- Mining stocks: taxed like any other stock.
This isn’t tax advice; check with a tax professional.
Getting started
- Decide how you want exposure: futures to trade actively, ETFs to hold.
- Pick a US-registered broker for it: how to choose.
- Learn what moves gold: our beginner’s guide.
- Practice with virtual money in our trade simulator.
- Start with one micro contract or a small ETF position, and set a stop.
Education, not financial or tax advice. Rules and products change, so check with the broker and the NFA before you trade. Futures use leverage and you can lose more than you deposit. See our disclaimer.
