Minerals and metals have been there right even before the evolution of any life on Earth. It has been even before dinosaurs existed. The utility has been continuing since time immemorial. It will continue to grow because everything we see around us has metals used in it, directly or indirectly, from electric to electronic items to building a home, office or multispeciality tower or preparing food. So, apparently, the involvement of all metals have been crucial. Even in hospitals and medical emergencies, metals are used immensely.
So, the development of the world depends largely on metals and their usages in the world. Therefore, metals come under essential commodities. Trading metals have been inclusive
Precious metals traders
There are several metals across the globe, but some of them are widely considered precious for usage due to their scarcity in availability. Gold, silver and platinum are among them. These metals are the most precious ones for more than one reason. They are also used in jewellery, automobile, medical equipment, medicines and electronic items. So, they are not abundantly available but used in several domains. Thus, their prices are hiking ever since day one.
Savvy investors find it interesting to make a scoop of money out of it when the market fluctuates. Interestingly, the precious metal market is one of the most fluctuating ones. So, traders have ample opportunities to draw great returns through scalping. There are a host of pretty causes of a hike in prices.
Investing in them is like a treasure hunt; the more you put in, the better you get in return after a short while.
Market players invest their money in precious metals because they are a perfect portfolio diversifier. So, you do not end up risking your money in one asset or instrument. Plus, there’s the luxury of taking delivery and holding them for the long term. They can be sold in the physical market.
So, that’s the best part while trading metals, precisely precious metals. Moreover, there are several ways attached to trading metals, including derivatives, futures, buying mining stocks, ETFs, etc.
Gold trading is an archaic tradition that is continuing for the longest time, ever since thousands of years. Monarchs recognised its value and started trading and used it as a currency for the exchange of goods and services. The metal is durable. It’s a good conductor of electricity and heat, provides the required malleability. Moreover, it is suitable for human skin. So, another reason it is sold in huge quantities. There’s no fear of corrosion either. Also, it is not found everywhere in the world. The scarcity and commendable usage make it so popular and in demand. However, it is the sentiment that drives prices of gold more than the demand-supply game. It is mostly uninterrupted by that phenomenon. In fact, when other markets go through turmoil like the COVID-19, people find refuge in gold items as safe investments.
More importantly, hoarders are driving the market. When they buy, the prices rise predominantly and vice-versa. These are mostly big businesses that sell gold and are responsible for plunging rates across the world.
During the financial crisis or concerns, it’s or political turmoil, gold comes as a rescuer. People take a chance to put their money in it.
Inflation is another factor that drives their consciousness towards the investment in gold. The portability of gold is quite inclusive. You can buy or invest in gold and carry it elsewhere without buying it physically. So, it has driven traders to put their funds into it.
Even during a war-like situation, prices of gold tend to rise when rates of other commodities, currencies and stock markets take a nosedive.
Gold’s symbol is Aurum (Au), which derives from the Latin term. Its atomic number is 79. The precious yellow metal appears naturally and in the purest of forms. It’s a ductile metal that is slightly dense, reddish-yellow, soft and bright. Interestingly, gold is the least reactive metal found. It is located in the form of grains or nuggets in alluvial deposits, veins and rocks.
It is resistant to many acids and does not dissolve in nitric acid.
Gold has long been considered as a wealth and medium for exchange. So, every investor should know about the characteristics and properties of yellow metal. Today, it has reached a tipping point where people do not need to physically take its stock for trading or seek the underlying asset. Instead, the contract for difference (CFD) method is gaining popularity. Here, investors can speculate on the price of gold without buying it and earn money.
If they predict the price will go down, and if it happens, then a trader earns money. Also, if the prediction is the prices will hike, the investor will make money if that happens. However, if the prediction goes wrong, money will be lost too.
So. the determination of loss and profit is done during the expiration of the contract. One satisfying thing is, you can put your bet on buying and selling of prices. Also, CFD opens thousands of markets for trading worldwide for trading.
Gold futures trading
In this form of trading, an agreement is inked where the delivery of gold is agreed upon a fixed price and the date. It helps investors in managing risks associated with buying gold. The gold futures trade come with a luxury of flexibility and better leverage as they get traded on a centralised exchange. Thus, the benefits of trading here is bigger than investing in other commodities.
A trader can sell the gold futures contract at discretion. You can use it for diversifying holding or hedging.
Meanwhile, one thing that may disappoint you is the time limit that comes attached with gold trading. So, you may have to pay a rollover fee. Therefore, long term holding may be expensive for a trader. Also, most exchanges provide big futures contract sizes. Thus, it negates a chance for other traders to make their career in the stream.
Trading gold with certificates
One might consider them similar to paper banknotes. These certificates are proof of ownership of a certain amount of gold. It has been going on since the seventeenth century. Some banks in the world are still dealing with it. However, most of them have closed such transactions after the emergence of several ways of gold trading. It exhibits the quantity of coins or bullions for its investor. Now, with the evolution of time, gold certificates come attached with a sentimental value.
So, it has become one of the collector’s items that may have a value more than the actual cost. However, it’s a risky investment considering some traders may not buy it at all.
Gold ETFs trading
Expert fund managers look after gold ETFs trading. Exchange-traded funds get affected by the price of gold. Through ETFs, gold traders get to attain a wide range of chances for trading in the commodity market. Moreover, all that and more with an investment of a limited amount. However, the integrity of our investment lies in the hands of the third party while you trade ETFs. So, that’s the biggest drawback.
Gold options trading
It is one of the most interesting ways of trading gold. These are derivatives where gold futures or physical gold are the underlying assets. Similar to the futures market, investors get the right to buy or sell gold assets at a fixed price and date in the days ahead of the future.
Physical gold trading
This is the most archaic yet one of the most prevalent ways of trading gold. Goldsmiths and gold showrooms have a huge role to play here. People can take their jewellery, bullion or coin for selling them off in the market. There are some making charges applied on jewellery. In the case of 24-carat gold, which is
The price of silver is not as high as gold, but it has enough volatility for traders. Thus, its prices keep on hiking and swinging between a set parameter. So, there’s always a chance of earning money for investors. Also, like gold, people can trade it physically by taking the delivery and hold it. You can purchase it in several forms, including jewellery, utensils, in the form of coins, bricks and biscuits etc. It is used extensively in industries for several purposes.
It is equally hoarded like gold for its utility in the market and various sectors. So, the demand and supply equation leads to its prices surging in the market in line with the precious yellow metal.
Interestingly, silver was once used extensively in photography. However, with the dawn of digital cameras, it has completely disappeared.
On the other side, several families have elevated their status to the middle class. Hence, the demand for electronic items has grown proportionately. So, usage of silver has gone higher.
Medical equipment, electrical connections to bearings, and industrial purpose turned it into a desirable commodity.
Properties of Silver
Silver is considered a chemical element. Its symbol Argentium (ag)is a Latin term meaning white or shiny. Its atomic number is 47. It’s a transition metal that is a superconductor of electricity. Silver is a soft and lustrous metal with the best reflectivity and thermal conductivity. It is found as a free element form in the Earth’s crust.
Alongside gold, silver is also used as a bullion coin. Its abundance is more than gold. However, compared to native metals, it is not vastly available.
Platinum is the least available metal in the world compared to gold and silver. It is mostly used in automobiles and jewellery. Moreover, it is the most recently found metal. Precisely, every vehicle manufacturing company uses it in one or the other way. Thus, it is traded around the world and in different zones. During the routine period, it may fetch higher prices than gold or may even trend lower. So, depending on the market supply, things can turn out to be different for people.
- It is an industrial metal, so investing in it is always going to be beneficial for traders. It is used to reduce the harmful effects of emissions. So, automobile giants use it effectively.
- Industries of chemical refining catalysts and petroleum also use it for several purposes.
- South Africa and Russia are the two countries that produce Platinum for the world.
- Moreover, the automobile sector determines the prices of platinum. Thus, when there’s a surge in the sales of vehicles, you’ll see the price of platinum rising subsequently.
It is mostly used for industrial purposes as opposed to making jewellery like the above three. Several sectors use silvery and shiny metal for manufacturing processes, especially for electronic items. It is used for treating groundwater, making medical equipment, dentistry, etc. The majority of its supply comes from nations like Russia, the United States, Canada and South Africa.
The metal was inducted most recently in jewellery making. In 1939, jewellers began to use them. When mixed with gold, the alloy is way stronger than white gold. Thus, it is used as a catalytic converter.
It is almost 12.6 per cent harder than platinum. So, in a place where platinum cannot be used, palladium does a better job. It is quite durable in that aspect.
Risks with trading metals
A trader cannot lay back by investing in precious metals. Therefore, it is necessary for them to learn the form of trading they are indulging themselves in. Traders need to be cautious while investing. However, if it is done using the right form of a method, and the goal hinge on a long-term investment. There may be technical imbalances and implications that may result in the fall of prices. When the time is uncertain and clouds of economic tensions rover around, investment in precious metals works wonders.
Trading metals is not a new phenomenon. People across the globe and civilizations have been doing so. There have been generations who used gold and silver primarily for exchanging goods and services. Besides, platinum, copper, aluminum, iron ore, and other metals have proved to be crucial for the development of the modern world. From building materials to create a car, airplane, trains, spacecraft, telescopes, modern types of machinery, homes, electronic devices like laptops, computers, digital cameras, etc., use metals for sustainable development.
So, the demand for metals is never-ending, and so is the trading. So, people who are willing to trade in the financial market of metals must use brokers like T1Markets, PrimeFin, 101investing, ETFinance, ROinvesting, HFTrading, and others. They ensure smooth transactions and zero commissions.
Is gold trading safe?
Gold is considered a safe haven for traders who are going through a tough phase of investments. Also, whenever there has been any calamity, natural disaster, political issues, war, and economic crises, the yellow metal has risen to the occasion and saved the day for the world. So, that’s how important trading gold has had. Moreover, the broker you choose is also important. It ensures whether a trader is going to make profits or not. So, investment with brokers like Global TradeATF, ABinvesting, TradedWell, and Capixal can ensure benefits.
How to invest in silver and platinum?
For investing in the market of silver and platinum or before buying them, you should check with experts whether they are fruitful in trading or not. Commodity trading requires patience and perseverance. You cannot rush into it like forex trading or cryptocurrencies. You have to wait for the right moment and movement for purchasing or selling. So, being aware of the market all time is essential for making the most of the market opportunity.
How to trade copper?
You can use a variety of instruments or ways for trading copper in the commodity market. Options, ETFs, contracts for difference, futures, stocks, etc. are the most prevalent methods that a trader can use. Also, it is among the most astounding metals that have huge demand and potential for investors.