IBKR (IE) Unallocated Gold and Silver
PRODUCTS
Trade London Gold
and Silver 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 (IE) Unallocated Gold and Silver
IBKR (IE) OTC derivatives referencing the price movements of physical Gold (XAUUSD) and Silver (XAGUSD) are available to qualifying customers.
IBKR (IE) Unallocated Gold/Silver are not listed instruments but traded over the counter between qualifying clients and IBKR (IE). 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 (IE) 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 (IE) 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 (IE) 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 (IE) 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.
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.
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 (IE) OTC derivatives referencing the price movement of physical gold and silver are offered by Interactive Brokers Ireland Limited, which is authorized and regulated by the Central Bank of Ireland register number C423427.
- IBKR (IE) gold and silver trading is not suitable for all investors. Due to the leveraged nature of IBKR (IE) gold and silver trading, your losses may exceed your initial investment and may cause your account to go into negative balance.
- Interactive Brokers Ireland Limited is a member of the Irish Investor Compensation Scheme (ICS)
Start trading like a professional today!
Open an AccountDisclosures
- IBKR (IE) 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.
Eligible customers must apply for Metals trading permissions via the Trading Permissions page in Account Management.