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Precious Metal Introduction

Precious metals trading refers to the process in which investors buy low and sell high to earn the difference when they are optimistic about the precious metals market. It can also be a hedging tool in the absence of an optimistic economic outlook to achieve asset preservation and appreciation. Since the world’s precious metal reserves are certain, precious metals can be used as a tool to preserve value. Therefore, precious metals have a good hedging function and can be used to fight inflation. At the same time, precious metals are used all over the world. They are difficult to be manipulated in the market and are not easy to cause collapse. There is no problem of depreciation. From Monday to Friday, trading can be carried out 24 hours a day, allowing investors to have more investment opportunities.

Why invest in precious metals?

Resist Inflation

The market has proven demand for these products for many years, including individual investors and institutional investors, whether for speculation or risk hedging.

Adequate Market Circulation

The market demand is not driven by any individual geopolitical situation, and many sensible investors trade precious metals to diversify their portfolios and hedge their positions, even as the market declines.

Two-way Transaction

The precious metals market is constantly changing, and there is always an opportunity to trade to choose a currency that depreciates or appreciates relative to another currency. Therefore, investors can make a profit by buying or selling strategies.

24-hour T+0 Transaction

The trading hours of precious metals, based on London time, formed a continuous trading market in London and New York (Chicago). London’s early morning pricing at 10:30 am opened the North American gold market.

Transaction Details

MarginThe margin requirement is 2%, which is 1:50 leverage.

Instrument Contract Size(1 lot) Min Trade Size (lot) Max Trade Size (lot) Floating Average Spread Instrument Contract Size(1 lot) Min Trade Size (lot) Max Trade Size (lot) Floating Average Spread
XAU/USD 100oz 0.01 10 13 XAG/USD 5000oz 0.01 10 13

Not-tradeableOffer quotes only, not-tradeable.

Instrument Contract Size(1 lot) Min Trade Size (lot) Max Trade Size (lot) Floating Average Spread Instrument Contract Size(1 lot) Min Trade Size (lot) Max Trade Size (lot) Floating Average Spread
XAU/AUD 100oz 0.01 10 – XAU/EUR 100oz 0.01 10 –
XAU/JPY 100oz 0.01 10 – XAG/EUR 5000oz 0.01 10 –

Transaction Example

Selling gold contracts (XAUUSD)

1 lot of XAUUSD is 100 ounces.

A customer believes that the valuation of XAUUSD is too high and will fall in the future. In response to this situation, the customer decided to sell XAUUSD.

Assuming XAUUSD is quoted at 1285.50/40 , the customer sells 7 lots of XAUUSD at 1280.40.

When the price of XAUUSD fell to 1282.50/40, the customer decided to close his trade. He bought 7 lots of XAUUSD at 1282.50.

Transaction Description Profit/Loss
Sell 7 lots of XAUUSD with a price of 1285.40 1285.40*100*7=899,780 USD (Contract Value)
The margin requirement is 2% 899,780*2%=17995.6USD Initial margin (will change due to market price)
The commission is 0.0036% of the contract value (unilateral) 899,780*0.0036%*2=64.78 USD (It is assumed that the closing price is the same as the opening price, so the commission will change due to market price.)
Close 7 lots of XAUUSD (buy), the buying price is 1282.50 (1285.40-1282.50)*100*7-64.78 = 1965.22 USD Profit