Swap on gold: the overnight cost scalpers forget
A scalp that turns into a hold starts paying swap every night, often in both directions on gold. How to calculate it before it eats the trade.
Scalpers ignore swap because scalps close the same day. Then one trade gets stuck, gets held “just until it comes back”, and swap starts eating it every night. On gold, that bill can be bigger than most traders expect, and it’s charged whether price moves in your favor or not.
The short version
- Swap is the overnight financing charge (or credit) for holding a position past the daily rollover.
- On gold it’s often negative in both directions, and one night a week (usually Wednesday) is charged three times to cover the weekend.
- Swap cost = swap per lot per night × lots × nights.
- If a scalp turns into a hold, it needs a new plan, including swap.
What swap is
When you hold a leveraged position past the end of the trading day, the position is financed overnight. For currency pairs, the charge reflects the interest rate difference between the two currencies plus the broker’s markup. For gold, it reflects the cost of financing the metal (gold pays no interest) plus the markup. It’s applied at the daily rollover, around the end of the New York session, and quoted per lot, per night, separately for longs and shorts.
Why gold swaps hurt
- Often negative both ways. At many brokers, gold swap is negative for longs and shorts. There’s no side that gets paid to wait.
- Big contract. Gold is 100 ounces per lot. A swap that looks small per ounce becomes real money per lot.
- Triple night. One night each week is charged three times to cover Saturday and Sunday, usually Wednesday night. Check which night your broker uses.
- Rate environment. When interest rates are high, financing costs rise and so do the swaps.
Do the math before you hold
Find the swap in MT5: right-click the symbol in Market Watch, open Specification and read “swap long” and “swap short”, plus the swap type (points, money, or percentage) and the triple-swap day.
Swap cost = swap per lot per night × lots × nights (counting the triple night as three)
Example: a swap of −$30 per lot per night on a 2-lot position held from Monday to Friday, with a triple Wednesday, is 6 charged nights:
−$30 × 2 × 6 = −$360.
That’s before the trade has moved in your favor at all. If the target on that position was $4 away, the trade makes $800 at target; swap already took 45% of it. If it was a scalp aiming for $1.50, it now needs to make back more than it was ever designed to win.
When swap is in points
Many brokers quote gold swap in points. On XAUUSD quoted to two decimals, one point is $0.01 per ounce, which is $1 per 100-ounce lot. So a swap of −30 points costs $30 per lot per night. Other brokers quote in money per lot or as an annual percentage, so read the swap type in the specification. When in doubt, hold 0.01 lots through one rollover on a small live position and read the swap column in the trade history. That’s the real number.
Rules for scalpers
- Close intraday trades before rollover unless holding is part of the plan. The rollover window also brings wide spreads, a second reason to be flat.
- If a scalp turns into a swing, it needs a new plan: new stop based on higher-timeframe structure, new size for the wider stop, and swap included in the target math.
- Never hold a losing scalp overnight “to see”. That’s the most expensive way to avoid a decision. Swap charges for every night of indecision.
- Watch the triple night. If you must hold, know whether Wednesday night is coming.
Swing traders: build it into the target
If you plan multi-day gold trades, add swap to the cost side before you take the trade. A five-day hold with a 2R target might really be 1.6R after swap. That’s still fine, as long as you know it before clicking, not after.
Swap-free accounts
Some brokers offer swap-free (Islamic) accounts. They usually replace swap with an administration fee after a set number of days, or widen spreads. Read the terms: “swap-free” rarely means “free”.
Quick FAQ
Is swap charged if I close at 20:59 UTC?
No. Swap applies only to positions open at the rollover moment. Close before it and there’s no charge.
Can swap ever be positive on gold?
At some brokers and in some rate environments, one side can be slightly positive. Check your broker; don’t assume.
Does swap differ between brokers?
A lot. It’s one of the costs worth comparing when choosing a gold broker, especially if you ever hold overnight.
Traps to avoid
- Ignoring swap because the account shows it in a separate column. It comes out of the same balance.
- Averaging into a loser overnight: more lots, more swap, bigger problem. What you do after the entry.
- Forgetting the triple night on a Wednesday hold.
Setups in the Free channel are intraday by default and say so when a trade is meant to be held. Join and keep swap where it belongs: out of your scalps.
