QIR1 2024: Not Bitcoin, but Gold. What Drives CFD Industry More?

While everyone was waiting for Bitcoin's halving, the first quarter of 2024 brought other developments that impacted the CFD industry even more. One of them was the growing price of gold, which brought both attention and increased retail traders' activity. But can this last forever, bringing permanent profits for CFD brokers?

Despite the large media hype around cryptocurrencies, CFD industry traders prefer other, more traditional instruments. For example, if we look into the report of CMC Markets for 2023, we will see that the most popular instrument class (according to the revenue) in 2023 was “index trading”. However, the second most popular asset class was “commodities”. It accounted for 22% of revenue versus 41% of the index trading. While the revenue share is not exactly the same as the volume share, it gives a pretty good picture of what clients of UK brokers choose to trade. Also, Gold and Silver are not the only traded instruments in the “commodity” class, so the mentioned 22% should be split between Gold, Silver, and Oil at least.

Another European broker, XTB, had similar results, but the revenue from commodities was even higher. In its report for 2023, we can see that while index trading was the most popular among XTB clients (47.8% of revenue), the second most popular category ”commodities,” brought in 39.9% of the revenue share, which was much bigger than in case of CMC Markets. In both cases, CMC Markets and XTB, we can see improvement in commodities revenue over 2022, which may result from more Gold trading in 2023.

Even more interesting results were published recently by Doo Prime. The global CFD broker, whose roots trace back to Hong Kong, had a volume of $95 billion in March of 2024. According to the same data, more than 70% of that volume was attributed to Gold trading (XAU/USD), while only 11% of the volume was related to EUR/USD. Assadour Khabayan, an analyst at Doo Prime, confirmed to Finance Magnates: “Gold is the most popular asset for Doo Prime clients in March. It had the highest trading volume at USD 67.11 billion and saw the biggest growth of USD 22.6 billion or 50.70% compared to February.”

Will Metals Trading Bring Extra Profits for CFD Brokers?

We can also agree that metals trading is popular. However, this will vary from broker to broker, depending on the region where they operate. Asia-focused brokers will benefit more from offering CFD Metals trading, while in other regions, such as Europe, it will be less popular. Finally, we need to remember that the current popularity of gold trading is a consequence of a bull run, which results in breaking previous record levels for gold prices. This attracts the attention of retail traders. But such a situation will not last forever. Gold itself is not a volatile market and, as such, naturally does not attract a lot of turnover.

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