PRECIOUS METAL TRADING

There are many factors to consider when trading spot gold and spot silver and for the informed trader, this can mean making significant profits in the precious metals markets.

Gold and Silver are two metals that serve many purposes. From being adorned as jewelry, to being used in the industrial and manufacturing sector, as well as serving as an alternate form of investment in the currency markets.

Trading on Gold and Silver is done electronically and bears the symbol of XAUUSD for Gold and XAGUSD for Silver. Both silver and gold are priced in U.S. dollars.

Many consider gold and silver to be the purest form of currency, devoid of any manipulation and therefore gold and silver are widely traded in in the currency markets. 

Trading the spot gold and spot silver is conducted over-the-counter with the prices fluctuating on a daily basis.

WHAT INFLUENCES GOLD & SILVER?

Before you begin to trade gold and silver you should first know what factors influence the price of the precious metal.

In the spot markets, gold and silver fluctuate largely for economic reasons. Gold and silver are considered to be a hedge against inflation. Thus, when inflation starts to rise, which erodes the purchasing power of the currency, gold and silver helps traders and investors protect their portfolios against a depreciating currency.

The precious metals are also susceptible to monetary policies such as interest rates and quantitative easing (money printing). During loose monetary policies, gold and silver tend to rise as a weaker currency and a slowing economy sends traders to invest in precious metals.

Here are some key economic reports that you should focus on when trading gold and silver.

  Economic reports such as GDP, CPI, unemployment are important for gold and silver as it influences the U.S. dollar exchange rate

  Interest rate decisions directly impact gold and silver prices as they move conversely to interest rates. Higher interest rates mean weaker gold and silver prices and vice-versa

  Economic and geo-political uncertainty often sends gold and silver prices higher as they are considered to be a "safe-haven" asset.

GOLD (XAUUSD) PRICING STRUCTURE

  Gold is priced in U.S. dollars per ounce
  The minimum tick size is $0.01
  Each tick is priced at $1 for a standard lot