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How to Trade Gold and Silver on Binance Futures
Disclaimer: This content is for general information and educational purposes only. Products mentioned in this article may not be available in your region.
Key Takeaways
Binance Futures now offers Gold (XAUUSDT) and Silver (XAGUSDT) contracts, expanding beyond cryptocurrencies.
These 24/7 contracts have lower entry barriers than traditional markets.
Traders can use leverage for greater exposure, though this requires careful risk management.
Introduction
Historically, trading precious metals meant navigating complex institutional markets with high costs and limited hours. Binance Futures changes this by offering Gold (XAU) and Silver (XAG) contracts. This integration allows users to trade traditional value stores with the flexibility of crypto technology.
What Are Gold and Silver Futures on Binance?
On Binance, gold and silver are traded as USDT-margined perpetual contracts. This means that while the price tracks the real value of ounces of gold or silver, the settlement is conducted in the stablecoin USDT.
Gold Futures: Ticker XAUUSDT
Silver Futures: Ticker XAGUSDT
Unlike physical settlement, where a trader might eventually take delivery of the metal, these contracts are cash-settled. Traders speculate on the price movements of the metals without needing to worry about storage, insurance, or logistics.
In other words, when you trade these contracts on Binance, you are not buying physical bars of gold or silver. Instead, you are trading a digital contract that tracks the real-world price of the metal.
The concept is simple: If you think the price will go up, you buy (Long). If you think the price will go down, you sell (Short). All profits and losses are paid in USDT.
Benefits of Trading Metals on a Crypto Exchange
The digitization of commodity trading offers several improvements over the "old way" of trading futures.
1. 24/7 market access
Old-school commodity markets have opening and closing times, and they take weekends off. If major political or economic news breaks on a Saturday, traditional traders are stuck until Monday morning. On Binance, the market is open 365 days a year. If news breaks at 3:00 AM on a Sunday, you can react and trade immediately.
2. Lower barriers to entry
In traditional markets, a single futures contract for gold is very expensive. It often requires thousands of dollars just to open a trade. This keeps most regular people out. Binance Futures allows you to trade fractions of an ounce, so you can start with a small amount of capital.
3. Leverage
Futures contracts allow traders to gain exposure to larger positions with a smaller amount of upfront capital (margin). While leverage varies by asset and market conditions, it allows for capital efficiency. For example, using 10x leverage means a trader can control $10,000 worth of gold contracts with roughly $1,000 of margin.
Understanding Funding Rates
If you are new to crypto futures, the concept of Funding Rates might sound confusing, but it’s actually quite simple. Since these futures contracts never expire (you can hold them forever), the system needs a way to make sure the contract price stays close to the real price of gold.
The funding payment: This is a payment exchanged between traders (buyers and sellers) every few hours. Note that this is not a fee paid to the exchange.
The opportunity: If the funding rate is positive, longs pay shorts. If negative, shorts pay longs. In certain market trends, holding a position (such as a short during a period of high bullish sentiment) may result in the trader earning passive income from these funding fees.
Risk Management
Trading these assets is easier than ever, but that means you can lose money faster than ever, too.
Leverage risk: Remember that leverage is a multiplier. If you use high leverage, a tiny price drop can wipe out your entire account. Example: If you use 20x leverage, and the price of gold drops by just 5%, you can lose 100% of your money. This is called forced liquidation.
Market volatility: While gold is generally considered a stable "safe haven" asset, the crypto-derivative markets can be volatile.
How to stay safe
To stay safe, traders often employ risk management strategies, including:
Setting strategic stop-loss orders to cap potential losses.
Managing position size to ensure account longevity.
Avoiding excessive leverage.
How to Trade Gold and Silver on Binance Futures
1. Log in to your Binance account, navigate to the [Futures] tab, then go to [USD(S)-M Futures].
Note: this product may not be available in certain regions.
2. Next, open the drop-down menu and search for XAUUSDT (for gold) or XAGUSDT (for silver).
You can also find these and other contracts under the [TradFi] category.
3. At the bottom right, you can check your Futures account balance. If your balance is zero, you can use the [Transfer], [Buy Crypto], or [Swap] features to add funds.
If this is your first time using Binance Futures, you will be required to open a Future Account.
You may also be required to complete a Futures Quiz before getting started.
4. When you are ready, you can use the order panel to buy or sell futures contracts.
5. If you click or tap [Cross] at the top right, you can switch between Cross Mode and Isolated Mode.
The Cross Margin Mode will consider all the assets in your futures account and all futures positions when calculating your margin and liquidation levels. This means that your open positions can affect each other, even if they are in different assets. For example, your gold position could be liquidated to cover losses on your silver position, even though they are different trading pairs.
The Isolated Margin Mode allows you to manage your risk on individual positions by restricting them to a specific asset. This means that your isolated position won’t be affected by fluctuations in other open positions you might have.
For more information, check out the following article: What Are Isolated Margin and Cross Margin in Crypto Trading?.
6. At the bottom of your screen, you can check your Positions, Open Orders, Order History, and much more.
For more detailed information, please check the FAQ: Perpetual Futures on Traditional Assets.
Closing Thoughts
The launch of XAUUSDT and XAGUSDT pairs on Binance Futures is closing the gap between traditional finance and the crypto space. Without the common barriers related to capital and trading hours, Binance Futures offers a convenient way to get precious metal exposure. Still, remember to respect the risks and make sure you understand how the product works before getting started with futures trading.
Further Reading
What Are Funding Rates in Crypto Markets?
What Are Isolated Margin and Cross Margin in Crypto Trading?
Bitcoin Spot ETF vs. Bitcoin Futures ETF: What's the Difference?
Disclaimer: This content is presented to you on an “as is” basis for general information and or educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the content is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. For more information, see our Terms of Use, Risk Warning and Binance Academy Terms.
Key Takeaways
Binance Futures now offers Gold (XAUUSDT) and Silver (XAGUSDT) contracts, expanding beyond cryptocurrencies.
These 24/7 contracts have lower entry barriers than traditional markets.
Traders can use leverage for greater exposure, though this requires careful risk management.
Introduction
Historically, trading precious metals meant navigating complex institutional markets with high costs and limited hours. Binance Futures changes this by offering Gold (XAU) and Silver (XAG) contracts. This integration allows users to trade traditional value stores with the flexibility of crypto technology.
What Are Gold and Silver Futures on Binance?
On Binance, gold and silver are traded as USDT-margined perpetual contracts. This means that while the price tracks the real value of ounces of gold or silver, the settlement is conducted in the stablecoin USDT.
Gold Futures: Ticker XAUUSDT
Silver Futures: Ticker XAGUSDT
Unlike physical settlement, where a trader might eventually take delivery of the metal, these contracts are cash-settled. Traders speculate on the price movements of the metals without needing to worry about storage, insurance, or logistics.
In other words, when you trade these contracts on Binance, you are not buying physical bars of gold or silver. Instead, you are trading a digital contract that tracks the real-world price of the metal.
The concept is simple: If you think the price will go up, you buy (Long). If you think the price will go down, you sell (Short). All profits and losses are paid in USDT.
Benefits of Trading Metals on a Crypto Exchange
The digitization of commodity trading offers several improvements over the "old way" of trading futures.
1. 24/7 market access
Old-school commodity markets have opening and closing times, and they take weekends off. If major political or economic news breaks on a Saturday, traditional traders are stuck until Monday morning. On Binance, the market is open 365 days a year. If news breaks at 3:00 AM on a Sunday, you can react and trade immediately.
2. Lower barriers to entry
In traditional markets, a single futures contract for gold is very expensive. It often requires thousands of dollars just to open a trade. This keeps most regular people out. Binance Futures allows you to trade fractions of an ounce, so you can start with a small amount of capital.
3. Leverage
Futures contracts allow traders to gain exposure to larger positions with a smaller amount of upfront capital (margin). While leverage varies by asset and market conditions, it allows for capital efficiency. For example, using 10x leverage means a trader can control $10,000 worth of gold contracts with roughly $1,000 of margin.
Understanding Funding Rates
If you are new to crypto futures, the concept of Funding Rates might sound confusing, but it’s actually quite simple. Since these futures contracts never expire (you can hold them forever), the system needs a way to make sure the contract price stays close to the real price of gold.
The funding payment: This is a payment exchanged between traders (buyers and sellers) every few hours. Note that this is not a fee paid to the exchange.
The opportunity: If the funding rate is positive, longs pay shorts. If negative, shorts pay longs. In certain market trends, holding a position (such as a short during a period of high bullish sentiment) may result in the trader earning passive income from these funding fees.
Risk Management
Trading these assets is easier than ever, but that means you can lose money faster than ever, too.
Leverage risk: Remember that leverage is a multiplier. If you use high leverage, a tiny price drop can wipe out your entire account. Example: If you use 20x leverage, and the price of gold drops by just 5%, you can lose 100% of your money. This is called forced liquidation.
Market volatility: While gold is generally considered a stable "safe haven" asset, the crypto-derivative markets can be volatile.
How to stay safe
To stay safe, traders often employ risk management strategies, including:
Setting strategic stop-loss orders to cap potential losses.
Managing position size to ensure account longevity.
Avoiding excessive leverage.
How to Trade Gold and Silver on Binance Futures
1. Log in to your Binance account, navigate to the [Futures] tab, then go to [USD(S)-M Futures].
Note: this product may not be available in certain regions.
2. Next, open the drop-down menu and search for XAUUSDT (for gold) or XAGUSDT (for silver).
You can also find these and other contracts under the [TradFi] category.
3. At the bottom right, you can check your Futures account balance. If your balance is zero, you can use the [Transfer], [Buy Crypto], or [Swap] features to add funds.
If this is your first time using Binance Futures, you will be required to open a Future Account.
You may also be required to complete a Futures Quiz before getting started.
4. When you are ready, you can use the order panel to buy or sell futures contracts.
5. If you click or tap [Cross] at the top right, you can switch between Cross Mode and Isolated Mode.
The Cross Margin Mode will consider all the assets in your futures account and all futures positions when calculating your margin and liquidation levels. This means that your open positions can affect each other, even if they are in different assets. For example, your gold position could be liquidated to cover losses on your silver position, even though they are different trading pairs.
The Isolated Margin Mode allows you to manage your risk on individual positions by restricting them to a specific asset. This means that your isolated position won’t be affected by fluctuations in other open positions you might have.
For more information, check out the following article: What Are Isolated Margin and Cross Margin in Crypto Trading?.
6. At the bottom of your screen, you can check your Positions, Open Orders, Order History, and much more.
For more detailed information, please check the FAQ: Perpetual Futures on Traditional Assets.
Closing Thoughts
The launch of XAUUSDT and XAGUSDT pairs on Binance Futures is closing the gap between traditional finance and the crypto space. Without the common barriers related to capital and trading hours, Binance Futures offers a convenient way to get precious metal exposure. Still, remember to respect the risks and make sure you understand how the product works before getting started with futures trading.
Further Reading
What Are Funding Rates in Crypto Markets?
What Are Isolated Margin and Cross Margin in Crypto Trading?
Bitcoin Spot ETF vs. Bitcoin Futures ETF: What's the Difference?
Disclaimer: This content is presented to you on an “as is” basis for general information and or educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the content is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. For more information, see our Terms of Use, Risk Warning and Binance Academy Terms.
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