Discover new trading opportunities in the precious metals market by trading gold with PFD Markets.
Precious metals, such as gold and silver, are highly sought after for their intrinsic value and scarcity. Investors often turn to these metals as a hedge against inflation and economic instability, viewing them as a safe haven during market volatility. Gold serves not only as a commodity but also as a form of currency and a store of wealth.
Metals trading involves buying and selling precious metals (gold, silver, platinum, palladium) and base/industrial metals (copper, aluminum, zinc) for profit, hedging, or industrial use. It operates through exchanges, OTC markets, and derivatives. Here’s a breakdown:
1. Types of Metals Traded
Precious Metals:
Gold, Silver, Platinum, Palladium
Used for investment, jewelry, and central bank reserves.
Base/Industrial Metals:
Copper, Aluminum, Nickel, Zinc, Lead
Used in construction, electronics, and manufacturing.
2. Where Metals Are Traded
Commodity Exchanges:
PFD – Gold, Silver, Copper futures.
Over-the-Counter (OTC):
Direct trades between banks, miners, and institutional investors.
Spot Markets:
Immediate physical delivery (e.g., gold bars, silver coins).
3. How Trading Works
A. Spot Trading
Buy/sell physical metals (e.g., gold bars) or ETF shares (e.g., SPDR Gold Trust).
Prices fluctuate based on supply/demand, USD strength, and geopolitical risks.
B. Futures & Options Contracts
Futures: Agreement to buy/sell metal at a set price on a future date (hedging/speculation).
Options: Right (but not obligation) to buy/sell at a predetermined price.
C. CFDs & Derivatives
Trade price movements without owning the metal (e.g., via leveraged CFDs).
4. Key Market Drivers
Economic Data: Inflation, interest rates (gold rises during uncertainty).
Industrial Demand: E.g., copper prices tied to global construction.
USD Strength: Metals priced in dollars (inverse relationship).
Geopolitics: Wars, sanctions disrupt supply chains.
Mining Output: Strikes, ESG policies affect supply.
5. Participants in Metals Trading
Miners & Producers,Investors,Jewelers & Manufacturers,Speculators.
