Precious Metals
Updated 1 week Ago
Precious metals trading involves buying and selling metals such as gold, silver, platinum, and palladium. Traders can speculate on price movements without holding the physical metals.
Key Advantages
Precious Metals CFDs
- CFDs allow trading without owning the underlying metals, reducing capital requirements and storage costs, while enabling profits from both rising and falling markets.
Portfolio Diversification
- Metals typically show low correlation with stocks and bonds, making them an effective diversification tool.
Hedging
- Precious metals can hedge against inflation and currency risk, forming an essential part of risk management strategies.
Safe-Haven Assets
- During economic or political uncertainty, precious metals tend to rise. Historically, metals have been durable, scarce, and long-term stores of value, measured in troy ounces for easy valuation comparison.
Price Drivers
- Supply and Demand: Tight supply or increased demand can boost prices; technological progress may reduce industrial metal values.
- Macro Indicators: Interest rates, GDP, and other economic data affect metal prices; metals often act as alternatives to cash.
- Market Conditions: Metals are traded relative to USD and often move inversely to it.
- Inflation: Currency devaluation or quantitative easing usually increases metal prices.
Major Traded Metals
- Gold (XAU) – highly liquid, large trading volume
- Silver (XAG)
- Platinum (XPT)
- Palladium (XPD)
- Other industrial metals: Lead (XPB), Zinc (XZN), Nickel (XNI), Aluminium (XAL), Copper (XCU)
Spread Reference (for guidance only)
| Symbol | Product | Avg Spread – Standard | Min Spread – RAW | Avg Spread – RAW |
|---|---|---|---|---|
| XAGAUD | Silver vs AUD | 0.08 | 0.007 | 0.069 |
| XAGEUR | Silver vs EUR | 0.03 | 0.004 | 0.019 |
| XAGUSD | Silver vs USD | 0.02 | 0.004 | 0.018 |
| XAUAUD | Gold vs AUD | 0.88 | 0 | 0.78 |
| XAUEUR | Gold vs EUR | 0.36 | 0.04 | 0.18 |
| XAUUSD | Gold vs USD | 0.25 | 0.02 | 0.13 |
| XPDUSD | Palladium vs USD | 10.76 | – | – |
| XPTUSD | Platinum vs USD | 4.71 | – | – |
| XPBUSD | Lead vs USD | 3.65 | 1.95 | 3.51 |
| XZNUSD | Zinc vs USD | 3.4 | 1.77 | 3.26 |
| XNIUSD | Nickel vs USD | 22.71 | 15.44 | 22.57 |
| XALUSD | Aluminium vs USD | 3.36 | 1.75 | 3.22 |
| XCUUSD | Copper vs USD | 5.18 | 2.95 | 5.04 |
| XAUGBP | Gold vs GBP | 0.48 | 0 | 0.36 |
| XAUSGD | Gold vs SGD | 0.93 | 0 | 0.74 |
| XAGSGD | Silver vs SGD | 0.035 | 0.004 | 0.029 |
| XAUCNH | Gold vs CNY | 5.57 | 1.03 | 4.55 |
Considerations Before Trading
- Geopolitical Risks
- Conflicts, wars, or terror attacks may push investors toward metals as safe-haven assets.
- USD Strength
- Metals are USD-denominated; a stronger dollar typically lowers metal prices, while a weaker dollar raises them.
- Central Bank Policies
- Interest rate changes, monetary policy, and gold reserve management affect supply-demand and prices.
- Inflation
- Metals hedge against inflation; high inflation usually increases demand and pushes prices higher.