Precious Metals
Precious metals such as gold trading involves investors having a clear picture of the precious metals market and taking advantage of its high volatility and constant price fluctuations.
Investors can also, however, use precious metals as a safe-haven asset to maintain and increase value when the economic outlook is less favorable. This has traditionally been the case for gold, which investors buy in when economic outlook turns into negative.
Commodity
Precious metals area a special commodity, strongly affected by multiple factors including international or domestic politics, the broader economic environment, regional conflicts and many other factors.
In addition, gold is settled in US dollars so changes in the value of the dollar will also affect prices.
Advantages of trading precious metals
- Maximum leverage up to 500:1, with minimum trades starting from 0.01 lots
- Two-way trading
- High liquidity, with the ability to speculate or hedge risks or investing
- Direct pricing form London Metal Exchange
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How to Trade Gold Contract?
The price of gold against the US dollar on September 27, 2016 was $ 1,334.60 / 1,334.80, and and proposed leverage is 100:1.
1 lot equals 100 ounces, the Gold value per ounce is $1,334.80
Trading Value: 100 x $1,334.80 = $133,480/lot; required Margin: $133,480 / 100 = $1334.80/lot
If the Gold price rises to: $1,400.00 / 1,400.20
Close Price: $1,400.00, a total of 100 ounces are worth of $140,000
Profits: $140,000- $133,480 = $6,520
If the Gold price falls to: $1,300.00 / 1,300.20
Close Price: $1,300.00, a total of 100 ounces are worth $130,000
Losses: $133,480- $130,000 = $3,480
