How to start trading Gold, Silver, Palladium, and Platinum on XM?

With XM, you can invest in Gold, Silver, Palladium, and Platinum through one trading account.

Gold trading and the Precious Metals market

Trading in gold and other precious metals, along with crude oil, copper, or oil, are industrial raw materials that play an important role in the commodity market and are contract-based tradable goods.

Precious metal-based contracts can include futures, spot prices, forwards, and options.

The intermediary that allows futures contracts to be traded in the futures, or commodities, stock market.

Investors around the world can access the top 50 commodity markets, with precious metals such as gold, silver, platinum, and palladium as the most tradable assets due to their high economic value and durability.

Although Asia is the world’s largest precious metals market (China, India, and Singapore are the main consumers of these raw materials), the raw materials market is dominated by European and American corporations, with the largest precious metals companies installed in Canada and Germany.

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How does Precious Metals Trading work on XM?

The futures market, where gold and other precious metals are actively traded in addition to currencies and stock indices, is available 24 hours a day, except weekends.

In general, precious metals are bought in two main ways: in spot contracts and in futures contracts.

Spot contracts entail the physical purchase or sale of these assets for payment and delivery on the spot date (generally two business days after the date on which the operation was carried out), while in future or standardized contracts The parties mutually agree to buy or sell precious metals of a specified quantity and quality for an agreed price (called the future price) with delivery and payment at a later date in the future (called the delivery date).

The buying and selling of futures take place without physical ownership of the commodities traded and is done through online trading.

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Why trade Precious Metals on XM?

The most-traded precious metals are gold, platinum, palladium, and silver, and the high volume of transactions of these assets is due to their intrinsic value retained, regardless of economic conditions.

The preference for buying online, and even physical ownership, of precious metals as a long-term investment has increased in recent decades.

Trading precious metals also present opportunities for those interested in short-term investments since derivatives contracts and exchange-traded contracts are less capital intensive and an easier way to take a position on their price movements.

Unlike most raw materials that depend mainly on production and consumption levels, gold prices do not depend on it: they follow the pulse of political changes that make it possible for this asset to function as a hedge against other markets at times.

Along with gold, platinum, palladium, and silver are also valuable assets traded by investors who consider them safe havens in times of monetary uncertainty.

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What affects the prices of Precious Metals?

There are several factors that affect price fluctuation and that can cause volatility in the precious metals market.

One of the most important factors in global financial institutions, whose investments are speculative in nature and can lead to bullish or bearish price movements.

Another factor affecting the market is end-user trends, triggered primarily by jewelry buyers: demand for jewelry drives prices up in precious metal markets.

The economy also has an important influence on market prices.

In a well-performing economy globally, the level of wealth is directly related to the demand for gold and other precious metals: when investors seek investment options that present a higher risk, the prices of certain precious metals tend to fall while the price of the others increases.

Last but not least, changes in demand for financial assets other than precious metals also contribute to price fluctuations.

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History of Gold, Silver, Palladium, and Platinum

Precious metals, and gold, in particular, have always been a symbol of wealth.

Since prehistoric times, when gold was used in barter, and throughout the centuries, whether in the form of coins, bars, or ingots of marked purity and weight, gold has been a valuable and in-demand asset.

The first gold coins were minted in 600 BC. and its use for monetary exchange (gold standard) lasted until the 1930s.

With a highly electrically conductive and malleable metal, gold is non-reactive to other elements, and is used in various industries, such as, for example, jewelry, chemical industry, electronics, and medicine.

Gold as a monetary asset was replaced by the fiat money system after 1976, but to this day it remains a solid asset to invest in.

Along with gold, for more than 4000 years silver has also been used as a monetary exchange with the silver standard that was in force until the 19th century.

Industrial, commercial, and consumer demand make silver a strong asset to invest in, and derivatives such as silver futures are traded in markets around the world.

With the advent of online trading, exchange-traded silver products have been an easy way for investors to gain exposure to the price of silver and invest in it for the long term.

Compared to trading gold and silver, which have been investment assets since ancient civilizations, platinum and palladium have a shorter history in the financial sector.

However, due to its scarcity, the amount of annual mining production, and its various uses in different industrial areas, it sometimes tends to sell for a higher price than gold.

10 times rarer than gold, platinum is associated with wealth, and gold-platinum alloys were already used in pre-Columbian civilizations.

The first reference to platinum in Europe dates from the 16th century, and since the 18th century, it has been used in the jewelry, chemical, dental and medical industries.

Like platinum, palladium also plays an essential role in technology.

Since its discovery in the 19th century in Europe, the global demand for palladium has not stopped growing, mainly in the automotive industry, but it is also widely used in medicine, the electrical industry, jewelry, and of course, as an asset.

Due to supply and demand (for example, market price determination), in times of continued economic stability, the price of platinum and palladium may exceed or equal the price of gold, while their prices may fall below in times of economic instability, making gold a more stable metal to invest in.

Find out the 5 Factors of Gold Market Price

Invest in Precious Metal Futures Contract

Precious metals have been one of the most popular industrial commodities to invest in since 1970.

In addition to trading currencies (forex), investing in gold and other precious metals for the long term is a popular form of risk portfolio management during times of inflation or economic/political uncertainty.

Futures contracts, also called derivative contracts, are those in which their value derives from the performance of the underlying asset.

One of the main reasons to invest in precious metal futures is risk mitigation: given the ability for the buyer and seller of a contract to set prices or rates in advance for future transactions, they can both ensure against drastic price movements or sudden events that can lead to increased losses.

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Make profit from falling market prices

Precious metals can be traded in both directions: if the market is expected to grow (upward trend), you can enter the trade by buying a futures contract (go long) and exit the trade by selling it; while if a downward movement is expected (downtrend), you can enter the operations by selling a futures contract (go short) and exit the operation by buying a contract.

It is also possible to operate with multiple futures contracts, which implies making several separate entries and exits, that is, entering contracts at different prices and exiting at one price, or vice versa.

The ability to trade in both directions allows investors to make a profit regardless of whether market movements are up or down.

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