For many traders, the idea of trading forex can be overwhelming and intimidating. Not only is it a completely different market to work with, but it also requires a different approach to trading. This is where precious metals trading can come in handy.
Precious metals trading is actually quite different to trading forex. However, it does share some similarities with forex trading. If you’re interested in getting started in forex trading, but you’re unsure where to start, this guide is for you.
What is Precious Metals Trading?
In commodities trading, precious metals are commodities that are typically stored and traded as commodities. They are often used as a store of wealth, a hedge against inflation, and a medium of exchange.
How to Trade Precious Metals
Trading physical precious metals such as gold and silver is very similar to trading futures in the commodities markets. If you’re new to precious metals trading, you might be surprised to learn that it’s actually very similar to trading stocks.
There are a number of platforms that now allow you to trade precious metals using just a scan of a photo ID and/or your voice. This includes some of the largest exchanges such as:
Chicago Mercantile Exchange (CME)
London Bullion Market Association (LBMA)
Singapore Commodity Exchange (SGX)
As with any market, you should do your research and make sure you understand the risks involved. Before you begin trading, make sure you are prepared for the potential ups and downs that are part and parcel of trading any market.
What Does a Precious Metals trader Do?
Like any other market, the precious metals market is driven by supply and demand.
To buy metals, you first need to find a seller. There are a number of websites that list physical bars and coins that you can buy. The most popular of these is eBay. However, you can also find listings on Amazon, Craigslist, and other online marketplaces.
Once you’ve found a seller, you can negotiate the price and decide which type of payment the seller will receive. You can make an offer by listing what you are looking to buy, and the seller can make an offer. It’s recommended that you make at least 2-3 offers before accepting the first one.
What Does a Precious Metals trader Do Next?
Like any other market, the price of precious metals is determined by supply and demand. To sell, you need to find a buyer. You can list your metals for sale on websites similar to eBay or Meetup or use online marketplaces.
To buy, you can use online exchanges or visit a local coin or bullion dealer. When you’re ready to sell, you will make an announcement on the website. This will include the price you’re selling for and the time of the announcement.
When there are multiple people selling, the price of gold and silver will typically go down. When there are multiple people buying, the price of gold and silver will typically go up.
Invest in Precious Metals
There are a number of ways to invest in gold and silver, including the following:
Commodity Futures and Options
Similar to stocks, futures and options on gold and silver are traded on exchanges. This means you can access the contract market to trade these metals like any other contract.
Trading futures and options on the Comex and the CME are open for 24 hours a day, 7 days a week.
You can sell options on gold and silver to gain a profit if the price goes up or buy them back later to make a profit if the price goes down. You can buy calls and puts on the same contract, meaning you can gain profits if gold and silver prices go up or down.
Trading futures and options on gold and silver is very similar to trading stocks. However, it’s important to note that there are some key differences, including the fact that you can’t buy and sell options on paper gold and silver. This means that you have to rely on the exchange to process any trades you make.
There are also some similarities between trading stocks and trading precious metals. For example, both markets can be very volatile and unpredictable. It’s important to remember that when you’re trading commodities, you can’t predict which direction the market will move in next.
However, there are also some key differences. For example, when you trade stocks, you can buy and sell shares of publicly traded companies. However, when you trade commodities, you are trading different types of commodities.
This guide should help you get started with forex trading. Now all you have to do is decide which type of trading you would like to try first!