Quote from: Amph on June 22, 2015, 10:48:04 AM

Quote from: deisik on June 22, 2015, 10:26:09 AM

Quote from: Amph on June 22, 2015, 10:11:51 AM

one could argue that you should not use a leverage that is higher than your total capital, but then i would say, what is the point of it, if i can just use my own capital(raising my investment to match the possible leverage) instead

The point is that you don't actually use all your capital, you limit your exposure to risk while "taking advantage of the tiny spread". At the same time, you can invest the bigger part of your capital (which is still available to you because of leverage in gold) in some safe instrument which is negatively correlated to gold, e.g. in US Treasuries...

Thereby your expectation of reward is higher than if you just bought gold with all your capital while risk remains the same

one can do the same thing without leverage, putting a % in one risky asset and the other in a more safe ones, without risking to cut the money in the more safe asset in the case your risky asset will goes wrong

You asked what's the point of buying gold on leverage versus buying the same amount of gold without leverage. In the former case you free some part of your capital (thereby giving you an opportunity to earn more through other instruments), while in the latter case you spend all your capital, the risk being the same in both of these cases...