What is Swap in XAUUSD?

In XAUUSD, there is the payment of swaps every day; this is the interest rate of a xauusd that the xauusd instrument earns per day. This interest for a xauusd instrument like the Australian Dollar is 5%, this means that every day a fraction of this five percent is paid to anyone holding this Australian Dollar.

This brings the Issue of paying and getting paid interest which is an Issue in Islamic Religion. Islamic Religion does not allow paying and getting paid interest, for Islamic xauusd traders there is an account designed in accordance with their Values; Known as Swap Free.

For this xauusd account a xauusd trader will not pay the overnight rollover interest on any gold and will also net get paid any interest, this is also known Shariah Compliant where there is no paying of RIBA (interest) - also referred to as Islamic Accounts.

For a xauusd trader to get a swap free account, a xauusd trader has to go to a xauusd Islamic xauusd broker and select the option of "Islamic Account", This option is provided under the Accounts Section of the xauusd broker specifying the instructions of opening one of these accounts.

Once a xauusd trader opens a this xauusd account, then the XAUUSD Trading rollover interest is removed. Once this no paying of interests is set, if a xauusd trader is using a trading platform such as the MetaTrader 4 then the rollover fee record will be set to zero.

The rollover fee is charged daily at the end of the trading day for those holding a particular xauusd instrument for which a swap is to be applied. As a trader if you do not want to pay this rollover you should close your trades before the end of the day, that way you will not pay the rollover fee as you are no longer holding open xauusd trade. Because the xauusd market does not open on Saturday and Sunday, the rollover for these 2 day will be charged on Wednesdays, meaning on Wednesday one will pay the rollover for Wednesday, Saturday and Sunday, and therefore on Wednesdays this rollover fee is paid 3 Times.

These positions that pay a rollover interest are commonly referred to by traders as Overnight Positions. Day Traders rarely leave their trades opened overnight and close them all before the end of the day. Swing Traders on the other hand may leave their trades opened for a few days and leave these trades overnight so as to capture more movement in the gold price trend.

Once a xauusd trader finds a swap free xauusd broker and opens and Islamic Account, the xauusd trader will have the same trading conditions as those of other traders, except for the paying of rollover fees. This means a xauusd trader will use the MetaTrader 4 XAUUSD Platform like all the other traders, the xauusd trader can trade all currencies, all indices, all CFDs, all metals and all other Financial Instruments provided by the xauusd Islamic broker.

However, be careful in selecting a swap free broker, some brokers will add a commission or add some pips to the spread you trade with to cover the swap(Swap Fee Broker). This is not supposed to happen as the xauusd trader will still be paying for the interest even though is disguised as another charge, good xauusd Brokers do not add any commission nor do they add any charge on to the spreads.

Another thing is that some brokers will charge a rollover fee if the position held by a xauusd trader is held for more than 5 days or more than 7 days, this should not be the case and the xauusd broker should not charge any carry over interest even if the open positions are held for more than five or seven days. For traders wanting to open this swap free Account with a xauusd Islamic xauusd broker it is good to check for any additional terms of trading for the Islamic Account that you are going to be opening to make sure that the xauusd broker you choose is really a no swap broker.

Islamic XAUUSD Account

Swap free accounts were introduced by brokers after demand for carry over interest free accounts grew among the Islamic xauusd traders. The traditional trading account entailed paying of rollover interests in what is known as rollover interest. This led to the introduction of Interest Free Accounts that Islamic traders could open and still keep in line with their rules on no paying and getting paid interest.