Precious metal trading refers to the process of investors who are optimistic about the precious metal market, buying low and selling high to earn the difference. It can also be a hedging method taken when the economic prospects are not optimistic, in order to realize the preservation and appreciation of assets. Because the world’s precious metal reserves are certain, precious metals can be used as a tool for value preservation.
Therefore, precious metals have a good hedging function, which can be used to fight inflation; at the same time, gold is popular in the world, and it is difficult to be manipulated in the market, and it is not easy to cause collapse. There is no problem of depreciation. It can be traded 24 hours a day, five days a week. Give investors more investment opportunities.
5 days 24 hours trading
Gold spot trading is open 24 hours a day, 5 days a week, and can be traded. Compared with the popular T+D, futures, stocks and other transactions, the time is longer and it is more convenient for traders to make flexible arrangements.
Spot gold trading implements a margin system, generally the leverage is relatively high, and many traders provide 100:1 leverage. This means that traders can use the leverage function to “enlarge” funds to trade. Due to leverage, the capital threshold for traders is relatively low. For example, when the price of gold is $1300 per ounce, then at a leverage of 100:1, trading 1 ounce of spot gold requires only about $10 in margin. Of course, margin leverage is a “double-edged sword”, it can increase profit opportunities, but also amplify the risk of loss.
Two-way trading can always find a “bull market”
Different from paper gold and physical transactions, one of the characteristics of gold spot transactions is that traders have trading opportunities regardless of whether the price of gold is rising or falling.
Zero handling fee
Gold spot transactions generally do not charge commissions. Traders profit from the difference between buying and selling points.
Factors affecting price
First of all, we see that most gold prices are denominated in U.S. dollars. Part of the rise and fall of gold prices is due to the strength of the U.S. dollar, and the other part is the market supply and demand of gold as a commodity.
Political events may also have a great impact on gold prices. For example, if there is a conflict in the Middle East, it may cause people to worry about the security of the country’s bonds or currency. In order to prevent risks, investors may withdraw funds to buy gold. The prices of oil and other commodities may also be affected. The collateral effect of commodity prices may affect the gold market, pushing up or down the price of gold to follow the trend of oil prices.
World financial crisis
When the financial system of major western countries such as the United States becomes unstable, world funds will be invested in gold, and the demand for gold will increase, and the price of gold will rise. At this time, gold played the function of a safe haven for funds. Only when the financial system is stable, investors’ confidence in gold will be greatly reduced, and selling gold will cause the price of gold to fall.
Precious metal supply and demand
The price of gold is based on the relationship between supply and demand. If the production of gold increases significantly, the price of gold may be affected and fall. However, if there is a long-term strike by miners and other reasons stop the increase in output, the price of gold will usually rise when demand exceeds supply.