Metals trading typically involves precious metals, like gold, silver, and platinum, which are rare substances with significant industrial applications. Investors who trade metals aim to profit from price appreciation since metals do not offer regular yields or dividends.
Compared to currency markets, gold and silver stock prices are relatively immune to the impact of political and economic events. Moreover, these assets serve as a hedge against inflation, offering an added layer of protection.
Spot metal traders typically keep an eye on the spot prices of gold and silver to stay informed about market movements. Spot prices are the current market prices of metals for immediate delivery, and they can change rapidly in response to global economic and political events.
The value of precious metals, like Gold, is closely tied to monetary policy and inflation. When fiat currencies are usually reissued (printed) during periods of market turbulence, the metal prices on the other hand are increased over time.
Precious metals can give traders much-needed diversification to their portfolio due to their typically low correlation with other types of investments like stocks or bonds. As a result, when the price of stocks or bonds falls, the price of precious metals may increase.
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