Trading Gold and Precious Metals
Highly valued since ancient times, precious metals, and gold in particular, have always been associated with monetary wealth.
On the financial markets, precious metals investments tend to hold their value over long periods of time.
Thus they provide a long-term safe
haven for commodity traders.
Factors affecting precious metals’ prices:
Supply and Demand
With the increase of demand, metal prices rise whereas when the demand is weak the value of precious metals declines.
Value of the U.S. Dollar
As the precious metals are dollar-denominated their price is generally inversely related to the value of the US dollar.
Inflation
Inflation has a direct effect on the price of precious metals. Generally, rising levels of inflation tend to raise the price of precious metals.
Industrial demand
Technology and industrial uses for gold, such as the demand for jewelry and electronics, can make the price of precious metals rise.
Investing in precious metals can help traders hedge against market volatility, political uncertainty, and economic collapse.
It can also be an important part of a diversified long-term investment portfolio.