Precious metals are seen as an excellent diversification strategy in volatile markets. Gold and Silver have always been recognised as valuable commodities. 888markets’ clients can trade Gold (XAU/USD) and Silver (XAG/USD) against the US Dollar.
Why Trade Precious Metals?
Precious metals like gold and silver are popular investments. They have an intrinsic value and carry no credit risk. The possibility of external inflation may also be negated since the underlying is held in fixed reserves. They may also provide insurance against any unexpected financial, political or other economic turmoil.
Some advantages of trading precious metals may include:
- Hedging against weakening currencies.
- Used as a safer form of investment during market downturns.
- Used to hedge physical bullion business at a low cost with the use of leverage.
Outlining the Difference Between Spot and Future Precious Metals
Precious metals are traded as either spot prices or futures prices. The spot price is the price of the metal in the market right now for immediate delivery. This is sometimes known as the “cash price” or “physical price”.
A futures price is the price of the metal to be delivered at a specified date in the future, determined by the date of the futures contract. Futures contracts are often used by companies to hedge exposure to the price movements of these metals.
With 888 markets you can trade either the spot or futures price of precious metals as a CFD.