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You may have heard about online trading of precious metals such as gold and silver. These two precious metals in particular gold plays major role in the financial market. In addition, they have many uses in various industries. One outstanding feature of these metals is that they are characterised by substantial speculative price gyrations in the financial market.
Due to their speculative gyrations roles in price, gold and silver are currently being traded online to make some gain. Just like the online currency trading, this is done without owning the physical gold or silver. This is greatly advantageous allowing many people to participate in the online gold or silver trade. Most investors understand that both gold and silver offers sound level of protection against fluctuation in the currency during hard economic times such as depression.
Merits of trading precious metals
1. Protection Against Depreciation
Both gold and silver offers substantial level of protection during economic depression. For instance, gold is a strong storage of purchase power. This is what helps it provide protection against depreciation. It is not directly linked to any kind of major world currency as used to be long ago. Both gold and silver are highly liquid and are widely accepted anywhere in the world. In particular, gold do perform well during the time when the central bank has used certain monetary policies to weaken its currency. In this case, the amount of currency in circulation will increase as expected but the amount of gold will remain relatively constant across the world.
2. No Liability
Precious metals such as gold and silver are not in any way a liability to an individual, bank, business entity or government. Companies can become bankrupt while the government can default on its debts. On the contrary, these two precious metals are not affected the same way. Your portfolio will remain its worth if you invest in gold or silver. It is possible for any other types of asset to loss its value to zero but this cannot happen with these precious metals.
3. International Liquidity
The precious metal such as gold and silver offers the best liquidity value internationally. It will be easy for you to sell gold or silver to any part of the world because of its high liquidity. This is because there will be someone willing to buy your precious metal irrespective of your location. Most people are willing to buy precious metal because they don’t depreciate in value.
Disadvantage Of Trading Precious Metals
1. Low Rate Of Return
As compared to currency trading, both gold and silver has low rate of return. This is because their prices do not change marginally over a short time period like in the case of currencies. Therefore you need to trade for quite a longer time to make a significant amount of return.
2. Appreciation Cycles
The only time when both gold and silver appreciate to highest value is during the time when the paper currency has depreciated in value.
3. Price Corrections
Just like any other traded commodities, both gold and silver are subjected to price correction. The disadvantage is that if you don’t hold these precious metals for long, the price correction can work against you.
Conclusion
Gold and silver are the two precious metals that play very important roles in the financial market. The current development in the industry allows people to trade these metals without physically owning them. These precious metals have proved to be very profitable when traded online for the past few decades. Trading gold or silver online is similar to Forex trading. Mostly this trading is offered by Forex brokers. You can trade either gold or silver and makes loads of profits just like it happens with Forex trading.
Article Source: sooperarticles.com/finance-articles/investing-articles/buying-selling-valuable-metal-could-more-profitable-than-forex-trading-696053.html
About Author:
Unlike the currency forex market, silver and gold prices shift quite slowly, thus it make it easier to implement automated trading system and succeed. Check out the details of an EA created for that on Forex Gold and Silver EA review. Furthermore check out an excellent broker that allows you to use EA and trade both silver and gold at ForexYard broker.Author: Owen El Moore
