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Metals Trading
Trading metals refers to the buying and selling of various metal commodities in financial markets. Metals are valuable resources that are traded globally due to their industrial, commercial, and investment purposes. Some of the commonly traded metals in financial markets include gold, silver, platinum, palladium, copper, and aluminium. Precious metals are a way of diversifying your portfolio and hedge against inflation. Gold is the most popular metal offering high liquidity.
Inflation Hedge
Metals like gold are known to preserve their value over time and can serve as a hedge against inflation. As the value of paper currency declines, the value of gold typically rises, protecting purchasing power.
Preserver Purchasing Power
Store of Value
Gold provides diversification benefits to investment portfolios. Its price movements typically have a low correlation with those of traditional assets such as stocks and bonds. By including gold in a diversified portfolio, investors can reduce overall portfolio volatility and enhance risk-adjusted returns.
Reduce Portfolio Risk
Speculative Opportunities
Traders can capitalise on short-term price fluctuations in the gold market to generate profits through speculative trading strategies. Gold prices are influenced by various factors, including supply and demand dynamics, central bank policies, macroeconomic indicators, and geopolitical events, providing ample trading opportunities for active traders.
Short Term Price Movement
Safe Haven Assets
Since gold tends to hold its value or even rise in price during periods of market volatility, geopolitical unrest, and economic uncertainty, it is frequently referred to as a safe-haven asset. Because of this, investors frequently use gold as a hedge against systemic risks in other financial markets, inflation, and currency devaluation.
Hedge Against market risk
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Popular Metals Pairs
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Why trade on Metals with KudoTrade
Diverse metal portfolio
Trade a wide range of major, minor, and exotic currency pairs to diversify your forex portfolio.
Flexible leverage options
Trade a wide range of major, minor, and exotic currency pairs to diversify your forex portfolio.
Competititve spreads
Trade a wide range of major, minor, and exotic currency pairs to diversify your forex portfolio.
Advanced charting tools
Trade a wide range of major, minor, and exotic currency pairs to diversify your forex portfolio.
24/5 market access
Trade a wide range of major, minor, and exotic currency pairs to diversify your forex portfolio.
Risk management tools
Trade a wide range of major, minor, and exotic currency pairs to diversify your forex portfolio.
Frequently Asked Questions
What are the main types of metals traded in the market?
The main types of metals traded are precious metals (e.g. gold, silver, platinum) and base metals (e.g. copper, aluminium, nickel, zinc).
What is the difference between precious metals and base metals?
Precious metals have high economic value due to their rarity and industrial uses, which are often used as investments and jewellery. Base metals are more common and used primarily in industrial and manufacturing processes.
What is the role of the London Metal Exchange (LME)?
The LME is the world’s leading exchange for trading base metals. It provides a platform for futures and option contracts, offering price discovery and risk management services.
How do interest rates impact metal prices?
Higher interest rates can lead to a stronger currency, making metals more expensive for foreign buyers and potentially lowering demand. On the other hand, lower interest rates can boost metal prices by reducing the opportunity cost of holding non-yielding assets like gold.
