What are precious metals? How to invest in precious metals?
In the investment world, precious metals have always been one of the investment tools loved and valued by investors. Whether used as a safe haven, against economic instability, or as a long-term store of value, precious metals have unique value and appeal. As the most common precious metal investment commodities, gold and silver have been widely recognized and used for portfolio diversification. In addition, precious metals such as platinum and palladium are also gaining traction among investors.

This article will delve into what precious metals are, introduce the types of precious metals, and provide information on how to invest in precious metals and the risks of investing in precious metals to help start your precious metals investment journey!

What are precious metals?
Precious metals refer to metals with high investment value, usually referring to the four metals gold, silver, platinum and palladium. These metals are widely recognized in the investment market and used for investment and trading. They possess a variety of properties, including rarity, ability to retain value, and a wide range of applications. The following are the characteristics of each precious metal:

What kind of precious metal investment products are there?
gold
Safe-haven assets: When an economic crisis occurs, funds will flow out of risky assets and move to other assets that relatively maintain their value. Gold and other precious metals are considered safe investment tools to preserve value, so funds will flow to gold as a safe haven. For example, the 2020 COVID-19 epidemic caused the international gold price to exceed US$2,000 in August.

Inflation hedging: Gold is usually considered an inflation hedging tool. When inflation is too severe and the actual investment returns in the stock, bond or real estate market weaken significantly, investors will tend to transfer some funds into gold to facilitate Maintain overall asset value. This is because the price of gold is generally not affected by economic fluctuations, and the price of gold usually rises during recessions.
Industrial use: The largest source of demand for gold is the jewelry industry, followed by aerospace, medicine, electronics, etc.
silver
Inflation Hedge: Silver, like other precious metals, is considered an inflation hedge asset because its price typically rises during periods of inflation. This is because inflation reduces the purchasing power of currency, causing investors to seek alternative investments to protect their money. Asset value.
Industrial Uses: In addition to being a material for jewelry, silver also has a wide range of industrial applications, such as electronics, solar panels, medical equipment, automobiles, and more.
Platinum and Palladium
Diversification: Platinum and palladium can diversify your investment portfolio and reduce investment risks, but they are less popular investment tools than gold and silver.
Industrial Uses: Platinum and palladium are also important members of the precious metals scene. Platinum has a wide range of applications in the automotive and jewelry industries, while palladium is a key component of catalytic converters.
The main factors that determine the trend of precious metals
Although investing in precious metals has attractive potential, it also carries certain risks. Investors should understand these risks and develop investment strategies accordingly.

Changes in supply and demand: The price of precious metals is affected by changes in supply and demand. Supply constraints, changes in industrial demand and investment demand can all have an impact on the price of precious metals.
Central Bank Policy: Central Bank Policy has an important impact on gold prices. Changes in central bank policy will affect the money supply and interest rate levels in the market, which will in turn affect the price of gold. For example, if the central bank adopts a tightening policy, the price of gold will fall; if the central bank adopts a loose policy, the price of gold will rise. Gold is a physical commodity that is not affected by government policies and can be used as an inflation hedge, making it a popular investment in similar policy environments.
Dollar Impact : Since gold is typically traded in U.S. dollars, changes in currencies tend to have a direct impact on gold prices. A stronger dollar makes it more expensive for other countries to buy gold, which reduces demand and causes gold prices to fall. When the dollar depreciates, the opposite is true.
How to invest in precious metals?
There are many ways to invest in precious metals using CFD investments, including physical investment, precious metal ETFs and futures. However, using Contracts for Difference (CFDs) to invest in precious metals is considered an attractive and convenient way.

CFDs are a type of financial derivatives that allow investors to participate in the precious metals trading market without holding physical precious metals. CFDs allow investors to engage in long-short trading, the opportunity to participate in both rising and falling prices simultaneously. This investment method has the following advantages

Small capital investment: Using CFDs, you can participate in the precious metals market with a smaller capital. Investors can choose an investment amount that suits them based on their financial strength and risk tolerance.
Long and short flexibility: Through CFDs, investors can participate in the opportunities for both rising and falling prices of precious metals at the same time. This allows investors to adjust their investment strategies according to market trends, thereby achieving greater profit potential.
Convenient online account opening: CFDs can be opened and traded online without any offline procedures, which is convenient and fast.
Low transaction costs: Investors only need to pay the spread and commission (if any) of the CFD, without paying physical delivery or management fees.
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common problem
1. Question: What are precious metals?
Answer: Precious metals refer to metals with high investment value, usually referring to the four metals gold, silver, platinum and palladium. These metals are widely recognized in the investment market and used for investment and trading

2. Question: What factors should we pay attention to when investing in precious metals?
Answer: There are risks in precious metal investment. The price of precious metals is affected by changes in supply and demand, central bank policies and the US dollar. Gold is a physical commodity that is not affected by government policies and can be used as an inflation hedge and is a popular safe-haven investment. Gold is typically traded in U.S. dollars, so changes in currencies tend to have a direct impact on gold prices.

3. Question: What are the channels for investing in precious metals?
A: Using Contracts for Difference (CFDs) to invest in precious metals is an attractive and convenient way. CFDs allow investors to participate in the precious metals trading market without holding physical precious metals and conduct long and short transactions, which is the opportunity to participate in rising and falling prices at the same time. This investment method has the following advantages: small capital investment, long and short flexibility, convenient online account opening, and low transaction costs. FXTU offers as low as zero commission for opening an account, please click here for details.