METWORLD DMCC - A Beginner's Guide to Precious Metals

The trading scenario is such that there is a great differentiating factor when it comes to trading of precious metals. Due to the high demand of precious metals like gold and silver, it is essential that you understand more about these metals to begin trading in them that will reap you long term benefits.

Gold

The reason why gold is popular is due to its durability factor that includes its ability to resist rust and it is corrosion proof. Additionally, the malleability factor is what makes it a popular choice and then the conductivity of heath and electricity. The industrial applications of this metal is related to electronics and dentistry.

It is essential to understand that the value of this precious metal is dependent upon gold trades. Gold is often traded for securing money and for stabilising financial scenario. Gold maintains its value even at the time of inflation. This is the reason why gold bonds are sought after by investors.

Silver

Prices of silver are always fluctuating due to the factors like its storage value and its tangible role with relation to industrial metal. Just as gold, silver too is in demand for investment purpose. However, all this is dependent on the innovations related to this metal.

• Silver is majorly used in medical products, industrial items and electrical appliances.
• Its applications in microcircuit markets, batteries and superconductor appliances makes it popular in the market.

Platinum

This metal is the most precious out of the two and it is highly priced in the market as it is much rare. Another thing that influences the price of this metal is its availability factor, this metal is annually mined that makes it rarely available in the market.

• Platinum too is used in industrial application; the automotive industry demands this metal to bring down harmful emissions. It is highly in demand by chemical refinery, petroleum and computer industry.
• Prices of platinum depends on sales and production figures of automobiles. Demands of converters in the automotive industry to reduce emissions is what increases the demand for this metal.
• Due to the concentrated availability of this metal in Russia and South Africa the price of this metal is at all time high.

If you are thinking of investing in precious metals then the following tips need to be considered:

• ETF or exchange traded funds are related to these three precious metals. It is the best way to invest, purchase and sell these metals. • Stocks and mutual funds are where investors put their money in precious metals trading. If you are a newbie at mining stocks then you need to begin investing in better performing stock records.
• Futures and options is more about providing liquidity to the investors engaged in investment related to precious metals. It is where the potential lies for profit making and at the same time the fluctuating prices of the precious commodity leads to losses at times.
• Bullion is about investment in coins and bars this is the best option for those who want to avoid risks. This is due to the liquid nature of bullion that makes it difficult to hoard or keep on hold.
• Gold ownership is beneficial in certificates to the investors that relieves them from the hassle of storage and even transportation. However, these are not as beneficial as the exchange rate or this precious metal itself.

Bottomline, trading in precious metals is a good way to diversify your business while at the same time earning beneficial gains.



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