Gold Spreads: Why the Headline Number Only Tells Part of the Story

As is often the case, there is more nuance to the gold spread story than headlines suggest.

While the headline change in retail spreads seems small, generally moving from 6-8 cents to closer to 10-12 cents at the TOB, percentage wise, is meaningful.  If we think about that in yield terms, that’s more than enough to cover a good amount of hedging costs for many brokers, which makes more proactive risk management less difficult to justify.

Despite the widening we’ve observed among many retail brokers, this does not come close to the more than doubling of average TOB spreads we’ve seen in the interbank markets. Those retail brokers who were large enough to onboard a Prime Broker and begin their own liquidity aggregation, quickly came to realise that higher margins are not the only challenge. Interacting directly with interbank liquidity does not always generate the tightest spreads, especially if hedge ratios are low and hedged flows more challenging.

But as much as the saying ‘spreads aren’t everything’ is overused in our industry (and it really is), it has also never been truer than right now. One of the less visible aspects is spread stability. 2025 saw an increasing number of brokers offering a fixed spread model, something that was anecdotally reported as being quite profitable, until it wasn’t… Q4 2025 saw fixed spread providers coming under increasing yield pressure as hedge costs rose and clients rode the wave of seemingly endless asset price appreciation. When Citadel announced it would exit the CFD space and cease offering fixed price gold liquidity to brokers, many of whom looked to replicate this structure with their own clients, spread stability altered dramatically. Spreads, like the tide, do not stay at one level forever and in late 2025, the tide began running.

Facing into 2026, many retail brokers were left with a set of trade-offs, widen spreads, move to more variable pricing with less reliance on fixed spreads, or continue showing a tight headline spread on screen while accepting a degradation in execution quality in the form of lower fill rates on limit orders or more slippage on market orders.

So while it might be fair to say that retail spreads in gold don’t appear to have shifted ‘all that much’, there is a lot going on just below the surface that tells a more complex story.

As brokers look to balance their risk / return profile in a trending asset price environment, now, more than ever, quality pricing from LPs is crucial. Liquidity providers with multi-layered quote filtration, continuous benchmarking of LP feeds, stability control mechanisms and access to liquidity across global hubs are best placed to maintain tight, stable pricing and execution quality. Until we see a material change in the current challenging liquidity environment, headline spreads alone will remain a poor measure of overall liquidity quality, and brokers will have to look a little deeper.