Sun. Feb 16th, 2020

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What is Metal Trading in Forex?

As we all know, it is possible to trade not only with currencies, stocks or commodities but also with metals such as gold, palladium, platinum, silver, copper, etc. Trading metals on the exchange is a modern investment method. Metals can also be affected by price fluctuations caused by various economic factors and the market atmosphere.

One of the most widely spread metals on the market is gold (XAU) and silver (XAG). The gold market is the most liquid because it is not too vulnerable to economic and financial fluctuations (especially to raise or cut interest rates). Learn how to predict gold price movements because gold correlates very well with major world currencies such as the Euro and the United States Dollar.
Trading with other metals such as nickel, zinc, copper and aluminum is possible by using Contracts For Difference (CFD), which are offered by various forex brokerage companies. 

Metal prices are set twice a day: at 10:30 and 15:30. The price is in United States Dollars per troy ounce.
Prices are set on the London Metal Exchange and appear as official prices used by everyone: from market traders to mining companies and central banks. When trading metals, the main focus is on long-term profits.

Today on this exchange trades metals such as platinum, palladium, gold, silver, copper and aluminum.

Global supply and demand significantly affect metal prices. When demand is high, metal prices fall, and vice versa – when demand is low, metal prices rise. However, this effect occurs mainly in a long-term perspective and has no impact on short-term fluctuations.

Any changes / fluctuations in the economy that are reflected in the unemployment rate, GDP, manufacturing activities, and during lowering or raising interest rates, affect the price of gold because market participants prefer safe-haven assets, such as metals.

China has a leadership position in producing metals such as gold, copper, aluminum, etc. Thus, any changes in the country’s production immediately affect the price of metals.

In addition, copper is widely used in all fields of industry, which means that the price of red metal depends on the situation and industry trends.

NYMEX Trading The

New York Mercantile Exchange (or NYMEX) is a place to trade various futures contracts.

Today on this exchange trades metals such as platinum, palladium, gold, silver, copper and aluminum.

Metal trading is available 24 hours because leading trading centers are located in Tokyo, Sydney, Zurich and Hong Kong.

LME Trading

London Metal Exchange, LME is the central exchange where metals are traded. Non-ferrous and precious metals traded on LME: tin, copper, zinc, nickel, lead, platinum, palladium, and aluminum.

Any changes / fluctuations in the economy that are reflected in the unemployment rate, GDP, manufacturing activities, and during lowering or raising interest rates, affect the price of gold because market participants prefer safe-haven assets, such as metals.

It should also be noted that the delivery of precious metals shows very accurate supply and demand in the metals market. So every report on inventory changes on the London Metal Exchange is one of the main indicators for market prices.