Gold Futures, Silver Futures & Precious Metals Trading

Precious metals futures markets offer investors access to everything from the computer industry to construction to macro-economics and geopolitics. Gold futures, silver futures, and other precious metals futures bring in a broad range of participants from commercial hedgers, to central banks to institutional traders and individuals looking for opportunities and diversity. Whether you’re looking to invest in gold futures, silver futures or even platinum futures, precious metal futures are sometimes volatile and unpredictable. However, this means they also offer flexible and creative trading opportunities, as well as ways to protect and hedge against broader moves in the stock and commodities sectors.

What Is a Precious Metals Futures Contract?

A precious metals futures contract is a legally binding agreement for delivery of gold, silver or other precious metal in the future at an agreed-upon price. The contracts are standardized by a futures exchange as to quantity, quality, time and place of delivery.

Because precious metal futures trade at centralized exchanges, trading futures contracts offers more financial leverage, flexibility and financial integrity than trading the commodities themselves. Financial leverage is the ability to trade and manage a high market value product with a fraction of the total value. Trading precious metals futures contracts is done with performance margin. It requires considerably less capital than the physical market. The leverage provides speculators a higher risk/higher return investment.

Precious Metals Trading at a Glance

Precious metals, such as gold and silver, are often thought of as jewelry markets while base metals, such as copper, go into homes and manufacturing. Platinum and palladium are precious metals, but are used in automobiles while gold is many things to many people a currency, an inflation hedge, a barometer of the economy, a central bank tool and of course, a commodity.

Metals markets provide investors with access to a wide variety of industries and applications, enabling many different participants to engage in trading as they look for new opportunities and diversity. The metals market offers many trading and risk management opportunities, but it is important to know that they are also sometimes volatile and unpredictable. Reviewing gold futures strategies and other precious metal trading strategies is the best way to understand these markets.

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