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Arbitrage in financial markets is often elusive — a textbook concept that rarely survives the friction of the real world. But today (08/08/2025), we capitalised on a genuine price divergence between spot gold (XAUUSD) and December 2025 gold futures (GOLDft). And unlike typical inefficiencies, this one was not a mispricing, but rather the result of a real structural change.
📸 The Trade Setup
The trade strategy is as follows:
| Asset | Action | Volume | Entry Price |
|---|---|---|---|
| XAUUSD (Spot) | Buy | 200 Ounces | $3,402.30 |
| GOLDft (Futures) | Sell | 200 Ounces | $3,494.38 |
This created a spread of $92.08 per ounce — significant by any historical or theoretical measure.
🧮 The Theory: Spot–Futures Parity
Traditionally, the relationship between spot and futures is governed by the cost-of-carry model:
With:
- Spot price: $3,396.50
- Interest rate: 4.9%
- Storage cost: 0.5%
- Time to expiry: ~0.4 years
🔍 This gives a fair value futures price of around $3,470.47.
Yet the actual futures price was $3,494.38+, creating a $24+ premium above fair value — before even accounting for short-term spikes beyond $3,530.
🚨 Not a Mispricing — A Tariff-Driven Premium
According to Reuters, this divergence is no accident. The U.S. has imposed new tariffs on 1kg and 100oz gold bars, particularly affecting imports from Switzerland — a key refining hub.
This policy change reclassified gold bars under a new U.S. tariff code, instantly increasing the cost of delivery to the U.S. This supply chain disruption inflated the price of U.S.-traded gold futures (COMEX) while spot gold remained unaffected in international markets.
So this wasn’t a classical arbitrage opening due to pricing error — it was a structural repricing caused by government policy.
💸 Real Profit, Real Trade
Despite the nature of the price gap, we executed the following:
- Bought 2 lots of spot gold at $3,402.30
- Sold 2 lots of Dec 2025 gold futures at $3,494.38
📈 Live Unrealized PnL (as of August 8, 2025):
| Position | PnL |
|---|---|
| Spot | –$574.00 |
| Futures | +$2,032.00 |
| Net | +$1,458.00 ✅ |
This confirms the viability of the trade for those with the right access, infrastructure, and understanding of macro policy effects.
🧠 The Lesson: Structural Arbitrage > Theoretical Arbitrage
This isn’t just an academic example — it’s a real-world opportunity born of regulation, not inefficiency. Traders and institutions that understand how policy, logistics, and trade flows interact with futures markets can unlock substantial alpha.
✅ Final Thoughts
- This isn’t your standard arbitrage. It’s more accurate to call it a regulatory spread opportunity.
- The risk was mitigated by perfect hedging: long spot vs short futures.
- The profit was real and quickly realised — and more could follow if the dislocation persists.
🟨 Gold traders, stay alert. The market is efficient… until policy makes it inefficient.
If you want to stay ahead of trades like this, follow us at [FXEQ Trading Limited] or join our live strategy feed.
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