What are Precious Metals?
Precious metals have been some of the most popular hard commodities to trade since the 1970s. Besides Foreign Exchange trading, trading and speculating in Gold, Silver and other Precious Metals is a worldwide popular way of hedging and managing the risk during the high inflation times or during Economic or Political tensions globally.
Beside being a safe heaven, one of the main purposes of trading the precious metals Futures is risk management given the ability to the contract buyer and seller to fix prices or rates in advance for future transactions. They can both ensure against drastic or sudden price movements that may cause increased losses. The price of Gold and Silver Futures Derivatives comes from the performance of the underlying asset for that particular Future contract.
Precious metals can be traded in both directions. If the metals prices are expected to move upwards, traders can enter by purchasing a futures contract and exit the trade by selling it. Similarly, if there is anticipation of a downward movement, traders can enter in a sell futures contract and exit the trade by buying a contract back again.
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