Metal without the vault
A gold perpetual follows the metal's price and never settles. Nobody stores anything, nothing is delivered, and the position stays open until you close it.
What you are holding
A gold perpetual is a contract tethered to the gold price by a funding payment. There is no bar, no vault, no delivery month and no roll. Compared with a futures contract that expires, the practical difference is that nothing forces you out on a date you did not choose.
Compared with a gold ETF, the difference is margin: the perpetual is a leveraged instrument by construction. On the venue we measure, the median maintenance margin on commodity markets is 3.00 per cent, against 6.67 per cent on equities and crypto. Lower margin is not a benefit by itself; it is a different amount of room before a position is reduced.
- No storage, no delivery, no expiry, no roll.
- Median maintenance margin on commodities: 3.00% of position value.
- Leverage is built in, which cuts both ways.
The funding, and what it tends to look like
Funding on metals is generally calmer than on crypto. Across the commodity markets we measure, the median rate annualises to about 4.21 per cent, against roughly 10.95 per cent on the crypto markets on the same venue. That reflects positioning rather than any property of gold: metals attract less leveraged directional flow.
Because the rate is smaller, the holding cost is a smaller part of the decision and the entry cost is a larger part. On a market with modest funding, what you pay to get in and out matters more than what you pay while you sit.
- Median annualised funding on commodities: about 4.21%.
- Calmer funding means the entry and exit cost dominates the holding cost.
- The rate is set by positioning, not by the metal.
Why gold is unusually good to make markets on
The number that decides this is the tick, converted to basis points. On a gold perpetual trading near $4,450 with a one-cent tick, one basis point is 46 ticks, so a single tick costs about 0.02 basis points. Improving the price by one tick to reach the front of the queue is therefore nearly free.
On the silver book alongside it, the same one-tick improvement is worth 1.47 basis points: sixty-eight times more, and enough to hand back most of the spread. Same venue, same code, opposite verdict. That single number is why our gold mode steps inside the touch and our silver settings do not.
- One tick on gold: about 0.02 bp. On silver: 1.47 bp.
- Cheap ticks make queue priority nearly free: the core of a maker's toolkit.
- The same parameters are right on one metal and wrong on the next.
Questions
What is a gold perpetual future?
A contract that tracks the gold price with no expiry and no delivery. It is tethered to the reference price by a funding payment between longs and shorts, so the position can be held indefinitely without rolling.
How is it different from a gold ETF?
An ETF is a fully funded holding with a custodian behind it. A perpetual is a margined contract with no claim on any metal. The perpetual trades around the clock and carries funding; the ETF trades in market hours and carries a management fee.
What margin does a gold perpetual need?
It varies by venue. On the venue we measure, the median maintenance margin across commodity markets is 3.00 per cent of position value, which is lower than the 6.67 per cent typical of equity and crypto markets there.
Is gold a good market for a market-making bot?
Unusually good, for one specific reason: the tick is worth about 0.02 basis points, so buying queue priority costs almost nothing. On silver the same tick is 1.47 basis points and the arithmetic reverses entirely.