OctaFX information and reviews
XM information and reviews
FXCC information and reviews
HFM information and reviews
FxPro information and reviews
FXCM information and reviews

How to trade CFDs on precious metals

25 May 2021

Since ancient times, people have exchanged gold and silver for goods and services. Times have changed, but values have remained the same. Today precious metals can be traded through terminals for online trading with CFDs. Where, how and how much you can earn on this - we will tell you in this article.

Benefits of trading precious metals

Metals have been the most popular trading instrument throughout history. In fact, before the invention of paper money, which was originally nothing more than IOUs, it was metals that was the general measure of a product value. 

Trading in precious metals attracts everyone - from central banks to individual investors. The most frequent question is “what to invest money in to save it?” And the most frequent answer is “in gold”. A rare exchange-traded fund doesn't have "metal stocks" in its assets.

In any incomprehensible situation on the world stage, we see the same reaction - gold starts to grow. Being the most ancient satellite of human civilization, it is still a safe haven asset. Quotes of silver and other metals are growing following gold. How can an individual investor without billions in his pocket make money on gold, silver, platinum, palladium...?

Metals trading features 

Precious metals are the second most popular trading instrument after oil. High intraday volatility provides traders with tremendous earning opportunities. The easily predictable influence of fundamental factors is a benefit as well. In fact, the only negative point is the need for a big capital for trading. If you have $100-200 there is nothing to catch on the metal market. If you have accumulated $1000-2000 you can try trading with minimal volumes. $10,000-20,000 is enough for short-term deals with great potential benefits. And if you are lucky and your capital exceeds $100,000, then you can safely form an investment portfolio from metals.

Gold trading

Gold is undisputedly the most popular metal to trade. It is especially in demand during periods of economic fluctuations. Long-term investments in gold are a win-win option for preserving and increasing funds in a crisis period. You can invest money both in gold itself and in stocks of the gold mining or manufacturing industry. Due to its demand in the market, gold has a fairly high volatility. Gold purchasing most often turns into profit already at medium-term distances. You only need to make a little effort in the analysis.

You can get acquainted with gold trading with these tickers:

2020 have once again confirmed the postulates of Charles Henry Dow: "History repeats itself" and "The market discounts everything". Gold price rose from $1,600 per troy ounce to $2,000. As the global economy is recovering from its peak, it tends to cool down. Investors consider diversifying their portfolios with other assets. However, not leaving gold at all.

Traders who trade gold CFDs can use margin rates of 1% per contract and thus earn even on intraday movements. Remember about risk management rules, of course.

The most active traders in the gold markets are Arabs and Chinese. Therefore, we advise you to pay attention to the news of these particular regions. Every month they report on their gold and foreign exchange reserves.

Silver Trade

Silver trading (XAGUSD, XAGEUR) is not fundamentally different from gold trading. The same quotes, the same recommended starting amounts. However, there are some nuances. So, for example, Silver often strengthens just after gold. Ðœany traders who missed signals for gold, open deals in silver. Thus, increasing/decreasing its value. In addition, the price of gold changes literally every tick while silver "shoots" the price into new levels.

For long-term distributed risk trades silver suits perfectly well. Changes in quotes bring more dividends. Silver gave an increase of 100% comparing with 25% of gold, given the same risk levels. The difference is clear. Using the same margin rate on CFDs (1%) allows traders to earn 200 and 300% per annum, without going beyond their own risk management systems.

Palladium trade

The main sources of palladium mining are located in Russia, the USA, Canada and Africa. Therefore, the change in price will be closely related to the economies of the listed states. The value of the precious metal is supported by its demand. Palladium (XPDUSD) is actively used in the automotive industry, jewelry sector, dentistry, production of electronics.

The exchange instrument XPDUSD has a dynamic amplitude of fluctuations. In some market formations, it can be used for hedging purposes. Palladium CFDs are best used by investors who prefer high intensity trading.

So, in previous articles on choosing a trading instrument, we have already talked about the peculiarities of trading currency pairs, cryptocurrency and CFDs on stocks and indices. In the following articles in this series, we’ll talk about other popular instruments so that you can make your own decision and choose the suitable assets for your trading.


Share: Tweet this or Share on Facebook


RoboForex Wins Best Mobile Trading App Title for its R MobileTrader at Global Forex Awards
RoboForex Wins Best Mobile Trading App Title for its R MobileTrader at Global Forex Awards

RoboForex, a brokerage company, is delighted to announce its victory in the prestigious category of "Best Mobile Trading App" at the Global Forex Awards 2022 - B2B.

7 Jun 2023

XM Receives Award at Finance Magnates Africa Summit
XM Receives Award at Finance Magnates Africa Summit

From May 8th to the 10th our team in South Africa was at the first ever Finance Magnates Summit (FMAS:23). XM was there as Diamond Sponsor, and during the summit, we were honoured with the Best Customer Service in Africa award...

30 May 2023

Five Reasons for Copy Trading: Unlocking Your Financial Potential
Five Reasons for Copy Trading: Unlocking Your Financial Potential

With the social trading sector expected to grow and reach a market size of $3.77 billion by 2028, copy trading, a form of social trading, is fast becoming a popular way for traders to achieve their financial and trading goals...

29 May 2023

TRXUSD now available on OctaFX trading platform
TRXUSD now available on OctaFX trading platform

TRXUSD is a popular high-cap cryptocurrency used on the TRON blockchain platform. With the addition of TRXUSD to our platform, our clients can diversify their investments and take advantage of the potential of this cryptocurrency on the market...

24 May 2023

An Introduction to Copy Trading Platforms and How to Choose One
An Introduction to Copy Trading Platforms and How to Choose One

Investing in financial markets can be both daunting and time consuming, especially for those with limited experience in trading. However, copy trading platforms offer a simple and convenient way...

24 May 2023

Planned optimization of MetaTrader 4 platform
Planned optimization of MetaTrader 4 platform

We would like to inform you that on Saturday, May 20, 2023, from 00:30 to 22:00 EEST, the MetaTrader 4 platform will be temporarily unavailable due to the planned...

22 May 2023

Editors' Picks

MultiBank Group information and reviews
MultiBank Group
RoboForex information and reviews
Vantage information and reviews
FP Markets information and reviews
FP Markets
Just2Trade information and reviews
AMarkets information and reviews

© 2006-2023 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.