The metal market (silver, palladium, gold and more) is a very exciting trading area. Metal’s always in demand. The market is highly volatile. To begin, let’s give you some tips.
The metal market is relatively straightforward, regardless of the metal you choose to trade.
It comprises of precious metal trading and industrial metal trading.
Precious metals are used in jewellery, but that’s only a part of their story. They are central to many industries – just one example being their importance in circuit boards. This is why they have a high value. Top listings are the London Bullion Market, the Tokyo Mercantile Exchange and the New York Mercantile Exchange.
Industrial metals are another important part of this market. Main ones are copper, tin and lead. But the market is inventive! A new and exciting commodity is scrap metal. Where to start? Best is to look at the London Metal Exchange, the Central Japan Commodities exchange and New York Mercantile Exchange.
Be aware, however, of this market’s volatility. It does mean you can get great revenue. However, you need to be very well informed, as well as responsible. One main reason for the potentially lucrative volatility of the market is that metals are often harvested in unstable parts of the world (i.e. the Middle East). That should not scare you, but you must keep up to date with international news – in any case this is one good way to predict the movement of many markets.
One tip: Far Eastern markets open earlier. Prices on these markets can give you a clue about what awaits you during any day.
Metal trading is a preferable approach for several reasons
• The market is big – there are many metals out there
• It will diversify your portfolio in an excellent way – the metal market is particularly independent of other markets
• It is a great hedge in periods of inflation
• There are many different investment options
• This commodity will always be in use - it is essential throughout the world
• You can actually physically own the commodity (think about Gold bullions)
If you trade with us, we will help you learn the trade of metal trade using our excellent tools and services. We believe it’s worth considering metal trading, as metals are indeed essential worldwide.
Gold is among the most attractive trading commodities. It may be a bit complex to make the difference among the types of gold stocks and shares. A number of users are not well acquainted with the market. This is why we’re offering our support.
The reasons behind gold’s popularity
This is a market offering tremendous opportunities for growth, as it’s by nature volatile. It was once a commodity of lower risk, but this is no longer the case. However, it’s a very good addition to a portfolio during inflation.
Gold production is not likely to increase more, as it’s reached its overall potential. Even considering this, the market of gold is affected by changes in supply and demand.
Main parameters affecting the formation of gold prices
The price of gold varies conditional on a number of factors, a main one being the lack of certainty itself. Traditionally in times of uncertainty and high inflation, traders turn towards the gold market. There are, however, also other phenomena behind gold pricing.
One important element is monetary policy. Once the opportunity cost of giving up assets based on interest drops, gold trading returns to the limelight.
Another important influencer is economy itself. Weak economies increase gold prices, strong economies decrease them. Therefore reports regarding salaries, production, jobs and GDP are important for the movements in the gold market. Inflation periods push prices up, though at the same time it eventually brings about economic growth. This interesting dynamic during inflation, combined with the effect of interest rates, brings about favourable gold trading conditions.
Additionally, as with other commodities, supply and demand dynamics are not to be forgotten. Currency value changes also affect gold prices, especially if the US dollar is involved – a falling value of the US dollar brings about increased value for gold.
It is important to keep in mind that most of the factors described above influence the prices based mostly on fear – this is why it’s not simple to make accurate predictions.
Nevertheless, gold remains an exciting commodity. We at FxtPremium offer you quick and simple access to this type of trading. We also make sure to keep you informed, and thus assist you in your strategies.
Do not hesitate to enter this market with FxtPremium now!