Although all markets are by their nature speculative, the metals market is necessarily rooted in supply and demand as the extraction and refinement of metals requires large scale operations and huge investments of capital. Due to their use in industry, there are certain unavoidable supply and demand dynamics responsible for moving the price of metals. This is great for traders as this asset lends itself particularly well to both fundamental and technical analysis.
Aside from their industrial applications, precious metals like gold and silver are important to traders as they’re considered safe haven assets. Investors turn to gold and silver in times of economic uncertainty as they provide a hedge against currency risk and are a sound addition to any investment portfolio. This is because they’re either uncorrelated or negatively correlated to conventional assets like stocks or the US dollar.
Trading involves significant risk of loss