A position on the price, not a bar in your hand

A position on the price beside a bar in a safe

A bar in a safe is a thing you can weigh, store and sell. A contract for difference is a position on the price of gold, settled in the account's currency, with no claim on any bar or piece. The two are not the same, and a buyer who confuses them is buying something they will never hold. FxPro quotes gold as a contract for difference, which means the account tracks the price but does not deliver metal.

That difference matters in a market like Dubai's, where gold is sold by weight and the tola is still on the ticket. A contract for difference has no weight, no tola, no gram, because no metal changes hands. The position is a number in an account, not a bar in a safe, and the price it tracks is the London metal price, not the Dubai counter price.

Why weight has no meaning in a contract that delivers nothing

A contract for difference is settled in the account's currency and carries no claim on any bar or piece. That means the weight of the gold is irrelevant: a position can be opened and closed without any metal being weighed, stored or delivered. The account is a way to take a view on the price, not a way to buy gold.

For a reader who wants to own gold, this is a crucial distinction. A bar bought at a Dubai counter has a weight, a karat and a making charge. A contract for difference has none of those things. It is a financial instrument, not a purchase of metal, and the only thing it shares with a bar is the price it tracks.

What to read in the terms before an account is opened

Opening an account requires identification and takes a day or two. A practice account exists and costs nothing, and it is the best way to see what a contract for difference looks like before committing any money. The terms will state the fees, the spreads and the margin requirements, and those are the numbers that decide whether the account is worth opening.

This site does not state those numbers, because they are set by the broker and can change. What this site does state is what the account is not: it is not a way to buy gold, it is not a storage service, and it is not a shop. A reader who wants a bar in a safe should go to a Dubai counter. A reader who wants a position on the price should read the terms first.

FxPro is not authorised by the Dubai Financial Services Authority. Its Dubai entity, FxPro Global Markets MENA Limited, held DFSA authorisation until it was withdrawn on 27 February 2020, and the DFSA public register still shows it that way. An account is therefore opened with a company regulated outside the Emirates - the group is authorised by the FCA in the United Kingdom and CySEC in Cyprus - so a resident here is dealing with a foreign firm and the protections of a locally licensed one do not apply. Nothing on this site is investment advice.