As the title states, will like to know more about what arbitrage strategies are commonly used for gold traders.


1 Answer 1


Without getting to deep into the quant stuff, a very common type of arbitrage trade used for gold is statistical arbitrage. This involves the purchase and sale of two tranches of correlated assets. For example, if the the price spread between gold and silver is very wide compared to where it is statistically, where gold is higher than silver, we can sell gold and buy silver. In this case, since the two assets are correlated, if their prices fall, we are hedged by the gold position. If the prices rise, we are hedged by the silver position. We make money when the spread converges to the standard distance.

If you are interested in learning more, research pairs trading, statistical arbitrage, cointegration, correlation, ect.

  • Anyone care to explain the down vote? It's a relatively simple overview of statistical arbitrage which is a common practice due to golds many correlated commodities. Sep 7, 2016 at 10:04
  • I didn't downvote you, but I think the question is asking about arbitrage opportunities with gold, not gold versus other metals. Jun 7, 2021 at 15:53

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