Gold and Silver Metals Trading Today
Gold and silver trading has become increasingly popular in recent years. More and more Forex brokers are offering gold and silver trading, as well as some other precious metals such as platinum and palladium, but gold and silver occupy most of the speculative interest in this category. In addition to trading precious metals online, there are many offers available to buy and sell gold and silver bullion and take physical property in the form of coins, bullion and other collectables.
Precious metals such as gold and silver have traditionally been used as coins, falling naturally into the “Forex” category, being totally replaced by fiduciary currencies in recent decades. Unfortunately, many people lose their minds when talking about precious metals, especially gold, forgetting that it is just another commodity for trading. There are two main reasons why people go crazy for gold: first, their unique position in most human cultures as the epitome of value reserve (ie, it is considered a safe asset), and in Second, monetarists believe that due to the global fiduciary monetary system, one day all currencies will collapse and precious metals will once again be enormously valuable, although this is highly questionable.
Gold and Silver Price Behavior
To be successful in gold and silver trading , gold buyers melbourne it is important not to think about the metal itself and only focus on the behavior of its price. Gold and silver prices are traditionally traded in US dollars, but some brokers will fix it in euros or other currencies. If you trade these metals against currencies other than the US dollar, you should bear in mind that most of the world observes it against the US dollar, so one must keep an eye on what is happening there.
One of the main reasons why gold and silver trading can be more attractive than currency trading is that these precious metals usually move in greater increments than Forex currency pairs. The value of major currency pairs typically fluctuates much less and has a greater tendency to return to average values. For example, in the last 1,000 days the four major currency pairs have moved by an average of 1.00% per day, while gold in US dollars has an average of 1.40%. Silver is even more volatile, averaging 2.78% per day.
It is important to keep in mind that raw materials generally move considerably more than coins, but minimum trading sizes in commodities other than gold and silver tend to be much larger, which can cause position size problems. for retail traders with smaller accounts. When it comes to long-term price movements, gold and silver beat currencies: while 30% movements in a year occur from time to time in Forex, and rarely more than that, major currencies never They move like gold and silver. Recent years have seen an annual increase of 70% in the price of gold and an almost tripled price (200%!) For silver, each denominated in US dollars. This means that although you may need more extensive stops than in Forex trading, there is often much more potential profit at the table. However, the offered leverage is typically considerably lower compared to Forex currency pairs, and nightly financing costs are typically higher.
Trading Method for Gold and Silver
If one is reading this and thinking that gold and silver trend trading is the way to go, it is probably on the right track: as with Forex currency pairs, trading in the direction of the movement of several months in the price It has been a profitable strategy in recent years, although over a longer period of time, with the six-month trend being generally the most prophetic. However, this result has probably been distorted due to the fact that precious metals have generally been prosperous vis-à-vis national currencies, and here we are approaching the hearts of those who believe that all non-convertible fiduciary currencies inevitably degrade in front of warehouses. widely accepted value such as precious metals. It is certainly difficult to find a strategy that has been profitable recently in the long term that is based on betting against gold and silver against currencies.