Trading in precious metal futures market or spot market in a speculative manner provides an important alternative to traditional means of investing in precious metals such as gold bullion, coins, and mining stocks, and where substantial profits, as well as losses can be made. Trading contracts in precious metals also provide valuable trading tools for commercial producers and the users of these metals.

Precious metals are traded on the futures and spot markets in contracts (a contract of gold is 100 oz while a contract of silver is 5,000 oz). Trading metals futures and metals options are appealing ways to speculate on the price of metals or to hedge risk. But trading Spot Metals has the added benefit of bringing the U.S. Dollar into the mix.

Spot Metals trades globally in an over-the-counter (OTC) with the main centers for trading in London, New York and Zurich. The market is available 24 hours a day, from Sunday at 5:00 p.m. Central Standard Time until Friday at 4:00 p.m. Central Standard Time, making it ideal for traders around the world. Liquidity in the Spot Metals market is typically highest when European market hours overlap with trading in New York, and the market can experience periods of illiquidity around the close of the U.S. market.

Reading a Spot Metal quote is similar to reading a FOREX quote. That is because trading Spot Metal is much like trading FOREX. FOREX is the simultaneous buying of one currency and selling of another. With Spot Metal, you simply trade the Spot Metal and the U.S. Dollar instead of two currencies. Trading Spot Metals with RolexForex allows you to speculate on the price movements of Spot Gold (XAU/USD) or Spot Silver (XAG/USD) relative to the U.S. Dollar.

So, essentially, when traders buy a Spot Metal contract, they are buying the Spot Metal and selling the U.S. Dollar. When traders sell a Spot Metal contract, they are selling the Spot Metal and buying the U.S. Dollar. That is because the Spot Metal prices normally rise with a fall in the U.S. Dollar, and fall with a rise in the U.S. Dollar. Because of this, many gold or silver traders buy gold or silver to hedge against a fall in the U.S. Dollar.

There are many different reasons that drive investors to trade Spot Gold and Spot Silver:

  • Trade long or short. Benefit from the market whether it’s moving up or down. Take either long or short positions, and open or close these positions at any time to react to real-time price volatility.
  • Trade intuitively, in real-time. Take advantage of real-time prices with nominal Spot Gold or Spot Silver spreads to speculate on the price movements of Spot Gold or Spot Silver relative to U.S. Dollar.
  • Part of a balanced, diversified asset allocation model for an overall investment portfolio.
  • As a risk management tool, used as a hedge against market volatility caused by economic, political or social turmoil.