Trading Precious Metals
Since the beginning of time, gold, silver, copper, platinum and palladium have been considered as highly valuable and sought after. Their high value comes as a result of their rarity. They are expensive, difficult to mine, and appreciated by industries and investors alike.
In today’s trading world, it is possible to invest in a commodity, such as gold without actually having to physically own the metal.
At AvaTrade you can easily trade gold, platinum and other precious metals online. Try metals trading with your leading regulated broker and enjoy the following benefits.
- Trade gold, platinum, palladium, silver and copper with competitive spreads
- Make bigger trades with leverage of up to
- Trade on the powerful MetaTrader 4 or MetaTrader 5 platform
- Trade whichever way you think the market will go – long or short
- Trade on the go with our new mobile app AvaTradeGO
- Get live client support in your language
- Copy trading platforms include AvaSocial, Zulutrade and Duplitrade
Advantages of Trading Precious Metals with AvaTrade
Trading precious metals with AvaTrade can be beneficial in a variety of ways:
- Short selling,
Short trading or “going short” is a way for a trader to profit when the prices of an asset are falling. This process allows you to trade and benefit when the markets are bearish (trending down). Contrary to physical metals trading, trading them as CFDs provides greater flexibility and liquidity which allows the trader to go short with fewer risks than when compared to trading the actual metals themselves
- Leveraged trading
Leveraged trading allows a trader to open a much larger position with minimum investment, meaning the trader can build up and control larger sums of money. Leverage can magnify your potential profits, and at the same time, can magnify your losses.
- Auto trading
Auto trading is a method of trading with a computer programme which helps determine if a trader should buy or sell at any given time. The trader sets up the software to make certain decisions based on technical rules that it implements.
What are Precious Metals
Precious metals are defined by their rarity, and their use as an investment vehicle (refers to any way a person or business can invest with the intention to ultimately grow their money). The term precious metals refers to the group of metals that are known to be unique and highly valuable. A mixture of economic and financial factors have historically affected the price of gold and other precious metals. When the markets are extremely volatile or bearish due to external drivers, precious metals have often been seen as a safe haven and an asset for retaining and storing wealth.
Precious metals also known as rare metals that have desired characteristics with unique beauty, are used commonly in jewellery pieces. These metals do not rust or decay, therefore, they can last for many years, often gaining in value. Some incredible uses for precious metals, for example where silver is incorporated in manufacturing are; Solar energy panels, medical and surgical equipment, everyday electronics, cell phones, cameras, mirrors and many other items. Gold is often desired for jewellery, electronics, orthodontics items since it is pliable and conducts electricity and can merge well with other metals. Popular items such as awards and medals are also made of gold.
Factors Influencing Precious Metal Trading
Several distinct factors come into play when analysing the prices of precious metals:
Can be affected by decline in production and political instability.
Mainly comes from jewellery, use in everyday technological products, and for investment purposes
- Market Volatility
Precious metals have often been used as a safe haven investment when markets are unpredictable
- Currency strength
Most precious metals are priced in USD, and thus it would be wise to monitor the dollar index in order to better forecast the price dynamics.
Investing in precious metals is a popular way of portfolio diversification. There are several options when looking to invest, starting with coins and bullions. These usually have a very low margin and trade close to the metal's current market price.
Mining stocks belonging to publicly traded companies give an investor the opportunity to buy them at the production level, eg. Gold mining companies.
ETFs serve the purpose for investors looking to have a mixture of exposure to precious metals and mining companies. There is a range of choices like funds in specific areas, or globally, large mining producers or smaller ones. As global economies improve, precious metal prices seem to have taken a hit since fewer investors feel the need to look for a safe haven. However, when times are tough people globally go looking for the safe bet of a precious metal bar. As a client of AvaTrade you will receive regular market reports and live, streaming news updates as well as all the analysis of the latest moves in the metals markets.
How AvaTrade Can Help
Join AvaTrade for as little as and start trading gold and other metals today. You’ll get access to a range of advantages and benefits that are exclusive to AvaTrade clients. We offer a range of intuitive and customisable platforms, including automated trading solutions, so you are guaranteed to find the trading environment that suits your style. You can trade gold and other commodities on the same screen as your forex trades, buy and sell directly from live charts, and set stops and limits in order to protect your capital. AvaTrade also offers award-winning customer support, in more than 15 languages, whenever the markets are open.
The best way to trade precious metals in 4 easy steps
- Open a trading account with AvaTrade
- Fund your account
- Choose precious metals to trade
- Start Trading
Metals Trading and Forex
Metals trading at AvaTrade is easy to understand, especially if you have already gained some experience with online forex trading. Adding forex to your portfolio diversifies it and allows you to build trading strategies based on the correlation between assets (e.g. precious metals and currencies). You can even hedge you precious metals positions with FX options trading.
Main Precious metals FAQ
- What are the advantages of trading precious metals?
One of the top advantages is the easy liquidity provided by precious metals. This keeps the market healthy. Another reason is the ever increasing demand for precious metals. As demand continues to increase it supports gains in price as well. Of course trading in precious metals is a good way to diversify if you typically trade in stocks or currencies. Perhaps the greatest advantage of trading in precious metals though is the profit potential they offer traders of all experience levels.
- Which precious metal is the best to trade?
Gold, silver, platinum, palladium. Which of these precious metals is the best to trade? There are advantages to each. Of course gold is the most popular of the precious metals, but its sister metal silver is close in popularity and often performs better than gold thanks to its dual nature as a store of value and an industrial metal. Platinum isn’t considered in the same class as gold and silver for investing, but it can be a good choice for traders, especially when it begins to trend. Finally there is palladium, which actually tracks platinum prices quite well, so traders can simply choose one or the other in most cases.
- What factors influence precious metal prices?
There are two factors that are the primary drivers in the prices of all precious metals. Those two factors are supply and demand. In many cases new traders only consider the demand side of this equation, but that can definitely lead to some unexpected price moves when supplies are either cut short suddenly or increased rapidly. In the case of silver, platinum, and palladium there can also be changes in industrial demand that will impact price. Any change in automobile production is likely to see all three of these industrial precious metals change price dramatically.