Finding arbitrage opportunities in Gold through Polymarket
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(this seems way too good to be true - needs more research)
We have identified two separate, mispriced markets for the same event (the closing price of gold on Dec 31, 2025).
Market A: "Will gold close above $4,000?"
"Yes" shares are priced at $0.67.
Market B: "Will gold close below $4,000?"
"Yes" shares are priced at $0.39.
These two outcomes are mutually exclusive. It is impossible for both to be "Yes." The total price for a complete set of outcomes should be $1.00.
The current combined price is $0.67 + $0.39 = $1.06. This $0.06 gap is a guaranteed, risk-free profit.
The Trade
The strategy is to sell the overpriced set of outcomes. For every 1 share of "A", we sell 1 share of "B".
SELL 1 Share of "Gold > $4000" (Yes)
Credit: +$0.67
SELL 1 Share of "Gold < $4000" (Yes)
Credit: +$0.39
Result: We immediately receive $1.06 in cash per set of shares sold.
3. Guaranteed Profit Scenarios
We have collected $1.06. Our maximum possible payout is $1.00. This guarantees a profit in every possible scenario.
Scenario 1: Gold closes ABOVE $4,000
We pay $1.00 on our "Gold > $4000" sale.
We pay $0.00 on our "Gold < $4000" sale.
Profit: $1.06 (Credit) - $1.00 (Payout) = $0.06
Scenario 2: Gold closes BELOW $4,000
We pay $0.00 on our "Gold > $4000" sale.
We pay $1.00 on our "Gold < $4000" sale.
Profit: $1.06 (Credit) - $1.00 (Payout) = $0.06
4. Summary & Risks
The Bottom Line: This is a pure mathematical arbitrage that locks in a minimum 6.0% return on our $1.00 of collateral (the payout)
The primary risks are not in the trade's logic but in its execution:
Fees: Transaction/gas fees must be lower than the $0.06 profit.
Liquidity (Slippage): We must be able to sell both shares at a combined price above $1.00.
Platform Risk: We are exposed to Polymarket's counterparty risk until the contract settles at the end of 2025.
Links:
https://polymarket.com/event/what-price-will-gold-close-at-in-2025-higher-strikes
https://polymarket.com/event/what-price-will-gold-close-at-in-2025-4000-5000
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