Maximizing returns, minimizing risk and increasing stability is something that every investor is looking for these days. Thus, a diversified portfolio along with investment in metals is the need of the hour. Metals show stability even in the time of economic uncertainty.
The global market is highly volatile these days. Still, precious metals like platinum, silver, palladium, and gold offer multiple advantages to the investors. Consumption and investors’ demand drive prices of these metals.
Gold remains to be the most preferred
Due to its worldwide usage in jewelry and the metal’s conductivity, malleability, as well as durability, gold remains to be the most traded metal in several markets around the world.
Various currencies and stocks remain venerable during a war situation, recession, banking sector crisis, or political crisis in the given country. Even in such conditions, gold often manages to retain its value. Whenever the global economy or real estate sector starts falling apart, investors from all around the world turn to this shiny metal as a safer alternative. Gold is often preferred by long-term investors as well.
Silver and platinum
If you are a short-term trader, you can consider taking a look at silver. It is regarded as an industrial metal due to its usage in multiple industries. The metal experiences a lot of fluctuations as its trade value is dependent on the country’s business conditions. Thus, silver is often looked upon as metal suitable for short-term trade.
Platinum is used in a variety of industries. The metal’s price is more than gold due to lack of availability and is often considered as an alternative to gold when gold’s prices start getting impacted due to overtrading. It can cost as much as 50 to 100 percent more than gold. Still platinum remains to be one of the less frequently traded metals.
The automobile industry leads the list of sectors that creates demand for platinum. The metal is also acquired by the high-tech industry as it is widely used in items like LCD TVs, batteries, hard disk drives, etc. Analysts believe the demand for this metal would keep on increasing during the next five years.
Palladium is a substitute for platinum
Palladium offers almost all the properties of platinum. It is dust resistant, ductile, soft, yet cheaper than platinum. Thus, it is used by several industries these days. Car makers use the same to keep control on harmful emissions during various stages of production. It is also used as a part of medical instruments, as well as in crowns used for dental fillings. Even in spite of all the uses, palladium often remains out of the list of most precious metals.
There’s a high demand for this metal in the emerging markets around the world, especially, where the automobile market is booming. Investors who do not wish to invest in foreign currencies and gold can definitely look at palladium as an alternative. Due to constant demand from heavy industries around the world, this metal’s prices would only keep on moving towards the upward direction.
Like other metals, investors do not have to buy the metal in physical form necessarily. They can opt for futures contracts, CFDs, or purchase ETFs of companies that are involved in palladium mining.
Need to consider risk factors
Of course, while dealing in metals in commodities exchange, you don’t need to deal with physical metal. You can either opt for commodity futures contract or select metal CFD trading while trading in the precious metal. You should also make sure that you have your risk management plan in place as such deal also involves risk factors. Using risk management tools can definitely help in controlling losses during bad times. You can surely go ahead and trade in metals if you are good at predicting ups and downs in metal prices.
No doubt that the rate of return remains low while trading in metals. But, when it comes to comparison between metals and foreign currency, metals stay one step ahead due to their intrinsic value. On the other hand, any national currency’s value can decrease or increase quickly.
Documentation remains to be the most crucial part when it comes to opening an online trading account. Don’t hesitate to share information about your net worth, income, and creditworthiness. You would also have to sign forms related to critical risk factors involved in such trading.
Of course, every broker would prefer dealing with someone who has the required creditworthiness, sufficient income and at least few months of trading experience. Thus, some brokers end up rejecting account opening forms of people who are not suitable for trading.
Create your trading plan before you start using the real account. Make sure that you understand the fundamental part while using trading platform’s demo version. Training will make sure that you do not make any errors while placing orders.
Once you receive the trading approval and your account is active, you would require adding a certain amount of funds in the account as the initial deposit. Deposit amount should be chosen according to the investor’s risk-tolerance and comfort level.
Control yourself from overtrading during the initial stages. Placing too many bets may not prove to be profitable. Always keep selective approach.
Choosing the perfect online trading platform
When it comes to choosing your online trading service provider, you should select someone who enjoys a good reputation and positive feedback from existing investors in the market. Someone like Admiral Markets can prove to be a superb option for experienced as well as new investors who wish to trade in multiple CFD products and CFD instruments.
They offer trading platforms in the form of MetaTrader 4, MT4 for OS X, MetaTrader 5, MT WebTrader, Android App, and iPhone App.
Their demo trading account offers live market like experience along with access to virtual funds of up to $10,000. Demo account can be accessed on multiple devices. Their quick start guide makes things really easy for new users. They provide education and analytical tools to users that can help in making well-informed decisions while trading. Deposits can be made in multiple currencies.
The organization is authorized by Estonian Financial Supervision Authority as well as the Financial Conduct Authority (FCA) in the UK. It also owns and operates multiple regulated trading companies in various countries around the world. The company’s customer support is available between 09:00 to 18.00 Eastern European Time.