Why Commodities Trading
Precious metal trading offers a popular way for investors to diversify their portfolios and hedge against market risks. Access to the precious metals markets allows our traders to take positions in an asset class that is highly sensitive to movements in the broader economy. During periods of stress in the broader economy, for example during a downturn, buying precious metals or being long can benefit the investor. At 3Sigma Markets you can access the precious metals market in order to grow or diversify your portfolio with gold and silver investments. There are a wide variety of metals available to trade, from the three precious metals of gold, silver and platinum, to base metals that include aluminium, copper, nickel, lead and zinc. Gold is the most actively traded metal due to its wide range of uses. From use in jewellery and electronics to the large reserves central banks hold, there is a constantly large supply and demand, influenced by market uncertainty, inflation and risk. Gold is the most sensitive to general sentiment, whether good or bad in the broader economy.
Why should I start trading Precious Metals?
- Hedging – trade precious metals and hedge against future risk – whether good or bad. Precious metals are considered safe haven investments and can be used to hedge against inflation and economic uncertainty. You can also sell precious metals if you feel we are entering a period of prosperity in the wider economy.
- Diversifying your other trading positions – precious metals allow you to spread you risk and help migrate risk in other trading positions you may hold.
- Liquidity – although not as big a market forex for example – precious metals do benefit from their international standing and are traded on a truly global market – providing ample liquidity to investors.
- Low barriers to entry and low costs: Online metal trading makes the process simple, with charting and analysis tools alongside low transaction costs for trading precious metals.
Trading Precious Metals – the Basics.
There are a range of different ways to invest in precious and base metals:
Bullion: Those who want the physical gold coins and bars and have space to store them can invest in bullion.
Contract for Difference CFDs: A Contract for Difference allows you to speculate on price movements in a number of financial markets, regardless of whether they’re rising or falling.
Futures: High liquidity and leverage are available with online metal trading futures, providing large potential profits but also losses.
Certificates: Similar to investing in bullion, without the hassle of having to transport and store the metals yourself.
Further contract specifications need to be considered when deciding whether to enter the metal trade. These include the base currency used, contract size, point value and the market opening hours. Otherwise you can begin online metal trading easily.
