FF Podcast: Rostro Group’s Saul Knapp on Gold Liquidity Squeeze, Broker Risk And AI
FinanceFeeds has released a new podcast episode featuring Editor-in-Chief Nikolai Isayev in conversation with Saul Knapp, Managing Director of Futures and Options at Rostro Group, the parent company of and . In this wide-ranging discussion, Knapp draws on decades of experience in risk, derivatives and liquidity management to unpack what is really happening behind the scenes as gold continues to dominate global trading flows.
positions itself as a heavily capitalised, multi-asset provider focused on institutional-grade liquidity and robust risk architecture. Through brands such as Scope Prime and Scope Markets, the group offers CFD and FX liquidity, futures and options access, and a mix of proprietary and third-party technology designed to keep execution stable even when markets are stressed. That combination of balance-sheet strength and in-house risk tooling gives Knapp a unique vantage point on the pressures building up across the gold market.
In the episode, Knapp and Isayev touch on all the flashpoints that matter for brokers and traders: explosive growth in gold volumes, the hidden concentration risk sitting on broker books, the constraints of physical delivery, and the knock-on impact for liquidity providers. For readers who want to go deeper into volatility, leverage, toxic flow and the growing role of AI in risk management, this is a must-watch conversation. Watch the full episode on FinanceFeeds here.
Gold’s One-Way Trend, Broker Vulnerabilities And Physical Shortages
explains that gold is now the most requested product across Rostro’s client base, with demand coming from brokers, institutional clients and physical purchaviewrs, particularly in the Middle East and Asia. What looks like a simple “one-way” uptrend on the chart is, in practice, creating serious concentration risk for brokers that have allowed gold positions to dominate their books without adequate capital or hedging capacity.
Many brokers, he notes, are offering leverage levels on gold that bear little resemblance to how the product is margined on platform. While COMEX margin sits around mid-single digits, some retail-facing firms advertise leverage of 1:500 or even 1:1000 on XAU pairs. When markets move several percent in a single session and clients are all positioned the identical way, this leverage mismatch can leave brokers unable to hedge at equivalent terms upstream, creating funding gaps, forced stop-outs and, in extreme cases, existential balance-sheet stress.
The discussion goes further into the physical market, where Knapp points to rumours of underreported central bank purchaseing and mounting hardy in sourcing metal to deliver between LBMA and COMEX. He raises the possibility of a liquidity squeeze and even periods of backwardation if spot demand continues to collide with tight physical supply. For brokers and LPs, that would mean more complex hedging, potentially wider spreads and a far more demanding environment for risk desks already stretched by high-volatility flows.
Retail Protection, Toxic Flow And The Rise Of AI-Driven Risk
For retail traders, Knapp’s message is clear: survival in this market begins with sensible leverage and broker selection. He urges market participants to avoid overtrading, to respect the volatility profile of gold and to prioritise firms that are well-capitalised and transparent about their risk frameworks. Incentives, bonuses and ultra-high leverage may look attractive at first glance, but they often signal that a broker is taking risks that could ultimately jeopardise client funds when markets move sharply.
The conversation then turns to toxic flow, including latency arbitrage, spot-versus-futures strategies and swap arbitrage exploiting rate diverseials and swap-free structures. With so much volume and volatility in gold, predatory strategies are more likely to slip into aggregate flows unless brokers and LPs have both the technology and the human oversight to detect them. Knapp describes Rostro’s approach, combining proprietary monitoring systems that refresh every 15 minutes with a specialist team tasked with identifying and neutralising abusive patterns before they damage upstream relationships.
Looking ahead, Knapp highlights the growing role of AI and machine learning across quant and risk teams. Automation is being used to enhance stress-testing, route flow more intelligently, refine internalisation logic and reduce manual error across the stack. Rather than replacing human judgment, these systems provide richer data and quicker feedback loops, allowing risk managers and executives to make better decisions as conditions change. For brokers, LPs and traders trying to understand where the industry is heading next, his insights offer a rare, candid look at the future of risk infrastructure in the age of AI.
