Foundation · Module F2
Five ways in — and a market dominated by everyone else.
What you'll learn
Where you fit in
None of them give you the actual metal — except one.
F1 ended with a 400 troy ounce Good Delivery bar sitting in a vault. F2 is about how you get from that bar to the price on your screen — and who else is in the room when you trade against it.
Retail is the smallest participant in this market by a wide margin. Knowing who the bigger players are, and what they're doing, is part of the job.
The instruments
Each of these is a different relationship to the underlying metal. Each has its own audience, mechanics, and trade-offs. Four of them are paper claims. One is the metal itself.
1 · Spot CFDs — XAU/USD
The most common retail entry point outside the US. A contract for difference, offered by a forex or CFD broker and priced off the spot gold market. You never own gold — you hold a contract that settles in cash against the price movement. Highly leveraged, traded nearly around the clock five days a week, accessible from almost anywhere with low minimum capital. Not available to US retail clients under Dodd-Frank. This is Path A in this Academy.
2 · Gold futures — GC and MGC
Exchange-listed contracts on the CME COMEX. The standard GC contract represents 100 troy ounces. The micro MGC contract represents 10 troy ounces. Both are centrally cleared, settled against the COMEX gold price, and the dominant route for US retail traders who can't access XAU/USD. Higher capital requirements than CFDs but no broker dealing-desk risk — every contract clears through the exchange. This is Path B.
3 · Gold ETFs
Exchange-traded funds that hold physical gold on your behalf. The largest — SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) — are listed on US stock exchanges and store their gold in LBMA-approved vaults in London. You buy them through a regular stock broker. No leverage by default, no expiry, no overnight financing — but also no overnight short side without borrowing. Slower-moving than CFDs or futures, by design.
4 · Gold mining stocks
Shares in companies that produce gold. Newmont, Barrick, Agnico Eagle, and dozens of smaller miners. These are not gold — they're gold-correlated equities with operational risk, management risk, country risk, and balance-sheet risk on top of the gold price. Mining stocks tend to move more than gold itself in both directions, which is why they're sometimes treated as a leveraged play on the metal. Every equity analyst who covers them treats them as equities, not as gold.
5 · Physical gold
Coins, small bars, large bars. Bought from dealers, mints, or banks. No counterparty, no leverage, no platform — but real storage, real insurance, and a real spread between the price you buy at and the price you sell at. This is genuinely owning the asset rather than holding a claim on it. The slowest and most expensive route on this list to trade in and out of, which is the point. The other four instruments are all derivatives of this one.
In practice
This Academy's two paths focus on XAU/USD spot and GC/MGC futures — the two speculation instruments where retail capital most actively trades, and where retail accounts most actively blow up. ETFs, mining stocks, and physical gold are covered in later phases.
Market participants
The gold market is dominated by institutional flows. Knowing who's pushing the price — and why — is part of reading it.
Central banks
The single largest category of gold holders in the world. Collectively, central banks hold more than 36,000 tonnes of gold reserves — around 17% of all the gold ever mined. The United States, Germany, Italy, France, Russia, and China are the biggest individual holders. When central banks buy or sell in size, it moves the market. The trend since 2010 has been consistent net buying, accelerating sharply after 2022 — when annual purchases first crossed 1,000 tonnes — particularly from emerging-market central banks diversifying away from US dollar reserves.
Bullion banks
A small group of LBMA market-making members — the six Full Market Makers are JP Morgan, HSBC, UBS, Goldman Sachs, Citi, and Morgan Stanley. These are the plumbing of the global gold market: they make markets in physical and paper gold, settle large trades, finance miners, vault metal for clients, and intermediate between central banks, ETFs, and everyone else. Most professional spot gold pricing originates with them.
Mining producers
Companies that physically dig gold out of the ground. Global mine production runs around 3,500 tonnes per year. Producers sometimes sell future production forward to hedge their revenue, which can create notable selling pressure when they do. Mine supply changes slowly — it's a long-term price input, not a short-term driver.
Physical demand — jewellery and industry
Jewellery historically accounts for roughly half of annual gold demand, with India and China the dominant consumers. Industrial use — electronics, dentistry, catalysts — sits around 7%. These categories shape long-term supply and demand but rarely move short-term futures or spot prices on their own. They're the slow tide underneath the day-to-day chop.
ETFs and speculators
Gold ETFs hold a substantial collective store of physical gold on behalf of investors — well over 3,000 tonnes as of 2025 — enough that their inflows and outflows are watched closely as a proxy for institutional sentiment. Alongside them, hedge funds and managed-money speculators trade COMEX gold futures heavily — the CFTC's weekly Commitments of Traders (COT) report shows their net positioning, and it's a useful (lagging) gauge of how hot money is leaning. This is the group most responsible for short-term price spikes.
Retail traders — us
By dollar volume, retail is a small share of the global gold market. The most visible retail footprint is in coin and small-bar demand from dealers, and in spot CFD volumes at forex brokers. On COMEX futures, retail is dwarfed by institutional capital. None of this means retail traders can't profit in gold — but it does mean you are not the one moving the price. The flows that drive the chart belong to someone else.
Even retail forex traders, who are used to feeling close to the action, are dwarfed in gold. You are trading against central banks, bullion banks, miners, ETF flows, and hedge funds — each with access to information, capital, and execution that you don't have. Understanding who's on the other side doesn't give you an edge. It just stops you from assuming you have one.
Carry this into F3