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A Guide to Metals Trading

A Guide to Metals Trading

Postby adamsmiths1 » Tue May 09, 2017 7:10 am

Ever since the discovery of precious metals such as silver and gold, they have been considered as valuables. If you, as a trader, want to see growth in your trading career, then you must include metals in your trading portfolio. In order to master the art of professional metal trading, you must not overlook the precious metals. If you are trading metals for the first time, then there may be a lot of questions that may come to your mind regarding the risks that are involved in precious metals trading. According to experts, you should have a good and accurate knowledge about the market before you start investing in it. (Information credit: https://www.easymarkets.com/eu/)

• Gold
Traders tend to see the market for precious metals as a pool of opportunities. And the shiniest of them all is gold. The durability as well as the value of gold makes it appropriate for not only industrial applications and the base of jewellery, but also it is fit as a form of currency. It is according to the 24/7 market operations, that the gold prices are subjected to change. The market sentiment plays a great role in effecting the price of gold. People tend to hoard precious metal such as gold. So the price of gold falls when the hoarders sell them. There are a number of reasons behind the hoarding of gold. One of the main reasons why people are more interested in hoarding gold is that they fear the situation when currency loses its value. Some other reasons why people hoard gold are systematic concerns and inflation.

• Silver
As an industrial metal, silver is more tangible compared to gold. But that does not mean that silver does not have any store value. Well, it’s just the opposite. Again, compared to gold, the price changes of silver are more volatile. This is because, silver has many industrial uses. The prices of silver fluctuate with new innovations and it is greatly influenced by demand and supply. If you are to trading silver, you must know that the price of silver is affected by its industrial use.

• Platinum
Unlike silver and gold, platinum is traded round the clock worldwide in the commodities market. When there is political stability in the routine period of market, platinum has the ability to get higher prices compared to gold. This is because of the fact that it is rare. There are many factors by which the prices of platinum are determined. As it is an industrial metal like silver, the prices of it are highly affected by its supply and demand. There is another fact that affects the prices of platinum to a great extent – there are only two countries that the platinum mines are concentrated in – South Africa and Russia.

You not only get protection from inflation from engaging in the trade of precious metals, but also, can use it as a hedge against risk. They have a lot of value and no credit risk. If you want to diversify your trading portfolio, then precious metals are one of the best ways to do that.
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