Precious metals like Gold and Silver are tradable instruments classed as a commodity, therefore making their price relatively uniform across the world.
Traders tend to use precious metals as ‘safe-haven’ assets which become more tradable as economic developments and political unrest caused increased volatility across other markets. After all, when adverse market conditions arise from war, recession, government debt issues, etc, Gold retains its value whereas stocks and currencies are vulnerable to significant losses.
Gold and Silver are characteristically limited in supply, which means that they tend to be of higher value. Where Gold is used as the main safe-haven asset, Silver is typically used in industrial production. Therefore, it’s more susceptible to price fluctuations from changes in business conditions.
Buying and selling precious metals doesn’t require you to buy or sell the physical product. You’re simply speculating on the changes in price, just like you would with other financial derivatives.
Price drivers for precious metals, however, are inversely different from other types of financial instruments. Where stocks and shares may see a decrease in value following political unrest or war, precious metals see an influx of investment, driving their prices higher.
Factors that usually affect precious metal prices are supply and demand, national and global economic trends, inflation, USD strength, interest rates, government policy, technology, and more.
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Information, charts or examples contained in this blog post are for illustration and educational purposes only. It should not be considered as an advice or endorsement to purchase or sell any security or financial instrument. We do not and cannot give any kind of financial advice. No employee or persons associated with us are registered or authorized to give financial advice. We do not trade on anyone's behalf, and we do not recommend any broker. On certain occasions, we have a material link to the product or service mentioned in the article. This may be in the form of compensation or remuneration.
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