Recently, many exchanges have opened USDT-margined gold and silver contracts. For us traders who are used to crypto operations, trading gold and silver directly with stablecoins really saves a lot of hassle.

But I have to be honest—gold contracts on exchanges and traditional forex broker strategies are completely on different channels. Many people don’t understand this difference and rush in blindly, only to be swept out by a single needle.

**Why is it so easy for "pins" to hit gold on exchanges?**

Honestly, although some top exchanges seem to have great liquidity, the order book depth for gold USDT contracts can’t compare to the international spot market at all.

Where is the real problem? After the US stock market closes or during periods of low trading volume, if someone places a large market order, the exchange’s internal order book is immediately broken through. The upper and lower wicks can be more exaggerated than on traditional forex platforms. Even more terrifying, we crypto traders are used to playing with 50x or 100x leverage. As soon as gold prices fluctuate by 1%, the system automatically triggers chain liquidations. Market orders keep hitting one after another, pushing the price even further out of line. In simple terms, the risk of "pinning" on exchanges is clearly higher than on forex platforms, and this is not to scare anyone.

**Should you choose contracts or spot tokens?**

Many beginners confuse XAUUSD contracts with PAXG (gold spot tokens). Actually, the selection criteria are quite different.

Contract trading: suitable for those who want to quickly seek profits and can tolerate short-term volatility. Leverage amplifies gains, but the risk of pinning and forced liquidation must be borne by yourself.

PAXG spot tokens: relatively more moderate. You’re buying a tokenized certificate of real gold, with less volatility than contracts, but liquidity might not be as good, and you may experience some slippage when selling.

The key is to consider your own risk preference. If you want to make quick money, go for contracts, but be prepared for pinning and liquidation risks. For more stability, choose tokenized gold products.

Remember one thing: there is no perfect trading instrument, only whether it suits your trading style. Once you choose, stick to strict stop-loss rules—don’t let a single thought ruin you.