Gold Trading Rises to 90% of Total Volumes, but Liquidity Is Not a Concern for CFD Brokers

Gold is trading near $4,300 an ounce. Although it corrected slightly from its peak of around $4,400, it has risen from $2,640 at the beginning of this year. Five years ago, the metal was trading at only around $1,500. Bank of America has lifted its 2026 gold forecast to $5,000.

Unlike other assets, gold has many functions. It is widely held by central banks globally and is used as jewellery in many regions. But what is driving the latest rally?

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Timid Demand Exploded after Gold Broke $3k

According to experts, the gold rally has been driven by both cyclical factors and structural ones such as central bank purchases and “de-dollarisation” narratives. Geopolitical tensions, including conflicts and tariffs, also contributed to the surge.David Morrison, Senior Market Analyst at Trade Nation

“Gold had effectively flown under the radar as far as the vast majority of our clients were concerned,” said David Morrison, Senior Market Analyst at Trade Nation. “Most were completely indifferent to gold, even as it made a new multi-year high and broke above $2,000.”

“Interest started to pick up early this year. But by the time gold got above $3,000 in March, many traders were actively shorting it. That has changed recently, and buying interest in gold has been strong and building.”

He further added that traders on his platform are “now very bullish on gold.”

Saul Knapp, MD of Futures & Options at Rostro Group

According to Saul Knapp, MD of Futures & Options at Rostro Group, which operates both retail and institutional venues, “the need for hedging physical gold exposure has absolutely been a catalyst” for the rise in CFD positions on the metal.

CFD Traders Like to Trade Gold

He further revealed that the volumes in gold futures contracts or spot instruments now range between 50 per cent and 90 per cent, depending on the geography, on Rostro. However, for Gold-i, a liquidity provider, only 5 per cent of its volumes come from gold.Tom Higgins, founder and CEO of Gold-i

While Rostro sees stronger demand from traders in the Middle East, Gold-i’s Founder and CEO, Tom Higgins, noted that “Asia is and always will be the strongest region for gold.”

Ultima Markets, a retail CFD provider, confirmed that gross demand for gold trading “rose by over one-third by Q2 2025.”

Data from Finance Magnates Intelligence shows that CFDs on metals accounted for more than 60 per cent of global broker volumes in the first half of 2025. The vast majority, nearly 80 per cent, came from gold contracts, another 18 per cent from silver, while only a small share came from other metals and commodities.

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The rally, combined with heavy trading volume, has also tested brokers’ risk management practices.

“Traders may be concerned that gold could undergo a short-term correction, so the overall investor sentiment indicator is currently in a cautious 50-50 state,” said Ultima Markets’ Analyst, Elon G.

“In a strongly trending, one-sided upward market, we as a broker will increase margin requirements, reduce leverage, enhance risk monitoring and hedging, expand liquidity, and dynamically adjust spreads.”

Risk Management Is the Key

Although none of the brokers explicitly announced any leverage reductions, OANDA Japan issued a caution to traders, while other major brands, including CMC Markets and IG, raised maintenance margins for gold.

“B-bookers can really suffer as a buy-and-hold client just keeps making money,” Higgins said. “A-booking is the best way to mitigate this.”

When the value of one asset rises rapidly, liquidity can sometimes be a concern for brokers. However, gold, due to its global demand, is an exception.

“Moves like this can be a challenge as it leads to clients maxing out limits,” Rostro’s Knapp added. “But from the broker’s perspective, a strong risk management strategy, combined with deep liquidity and competitive pricing, is vital for success.”

“We don't face liquidity issues, but when delivery gets squeezed, we see this reflected through higher swap rates and spreads. Some brokers may restrict the amount of gold they offer, but by maintaining a tight risk management strategy, we can avoid being overused or overstretched on any single asset.”

Although experts agreed that gold generally has abundant liquidity, Higgins pointed out that “the silver short squeeze recently was a stark warning that this is not always the case.”