Precious metals have always been used as means of exchange between traders and as a store of wealth, with gold being the metal most commonly used for this purpose.
Precious metals offer insights into economic health and are often viewed as a safe haven during times of economic turmoil. As market demand is not driven by any individual geography, many smart investors trade precious metals in order to diversify their portfolio and hedge their positions, even when the markets are down.
- Inflation and currency hedge
- Often bought during times of economic or political upheaval
- Gold, silver and other metals have great upside price appreciation potential
Gold is unique for its durability (it doesn’t rust or corrode), malleability, and ability to conduct both heat and electricity. It has some industrial applications in dentistry and electronics, but we know it principally as a base for jewelry and as a form of currency.
Unlike gold, the price of silver swings between its perceived role as a store of value and its role as an industrial metal. For this reason, price fluctuations in the silver market are more volatile than gold.
Like gold and silver, platinum is traded around the clock on global commodities markets. It often tends to fetch a higher price (per troy ounce) than gold during routine periods of market and political stability, simply because it’s much rarer.
The precious metals market can be extremely volatile, so it might not be suitable for all investors. Supply and demand play a key role. Trading precious metals means that you’ll be speculating on prices rising or falling with financial derivates like spread bets and CFDs.
Beyond this, there are many ways to trade metals – CFD metals allow you to trade on the price movement of the metal, but doesn’t obligate you to actually buy it. When you want to buy the actual metal you have to find someone that sells it at the price you want to pay, and when you sell it you have to find someone to buy it at the price you want to get. When you trade with us, you can choose whether you want to trade precious metal futures, spot prices and options.