The most frequently traded precious metals are gold, platinum, palladium and silver, and the high trading volume on these commodities is attributed to their retained intrinsic value, regardless of economic conditions. The preference for the online purchase, and even physical ownership, of precious metals as long-term investment has tremendously increased in recent decades. Trading precious metals also presents opportunities for those interested in short-term investment since derivatives and exchange-traded contracts are a less capital-intensive and simpler way to take a position on their price movements.
Trading gold and silver has become increasingly popular over recent years. More and more forex brokers are offering trading in gold and silver, as well as some other precious metals such as platinum and palladium, but gold and silver take up most of the speculative interest in this category. Precious metals such as gold and silver have traditionally been currencies themselves, falling naturally in the “Forex” category being fully replaced by fiat currency over recent decades.
Gold and silver have been attracting more and more investors recently. In this era of financial uncertainty, when market collapses are looming large, people regard paper money as less valuable than before. That’s why precious metals are gaining popularity. Gold and silver are the most in-demand metals but differ from each other in a couple of ways. Before investing, it is important for any investor to know a few things about these outstanding metals to find the right way of trading and to ensure profit.
To trade gold and silver successfully, it is important to put thoughts of the commodity itself out of your mind and just focus on the behavior of its price. Gold and silver prices are traditionally quoted in U.S. Dollars, but some brokers will price it in Euros and other currencies. If you do trade these metals against currencies other than the U.S. Dollar, do keep in mind that most of the world watches it against the U.S. Dollar, so keep an eye on what is going on there.
Precious metals have been some of the most popular hard commodities to trade since the 1970s. Besides currency exchange (forex) trading, investing in gold and other precious metals long-term is a worldwide popular way of portfolio risk management during times of inflation or economic/political uncertainty. Whether you are a hedger or a speculator, remember that trading involves substantial risk and is not suitable for everyone. Although there can be significant profits for those who get involved in trading futures on gold and silver, remember that futures trading is best left to traders who have the expertise needed to succeed in these markets.