Today, there are many different ways to trade metals on the stock market. From gold to silver, metals are a great investment to diversify your portfolio. While there are a number of metals that can be traded across the market, the most well-known of the metals are gold and silver. There is no one metal that is the best to trade since each comes with its own risks and payoffs, but there can be certain metals that are more opportune for your portfolios than others.
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Gold is one of the most durable metals and is used across a number of different industries from electronics, to beauty, and even dentistry. The price and value of gold is constantly fluctuating every hour of every day. Often times, the price is not affected as frequently by supply and demand but rather affected by the buying and selling of preserved gold (jewelry, coins, etc.).
Gold prices can be affected by several factors. Inflation causes a negative rate of return to occur which in turn causes people turn to gold which remains static in price and value. In times of political turmoil, gold is also seen as a hot commodity. With market fluctuations, many people become scared of losing their life savings and turn to gold to store their wealth in a safer asset. Likewise, when banks become unstable, gold is also looked upon as a safe asset to turn to.
Profits in the gold market can be made in a few different ways. Investors can purchase gold coins or jewelry with the expectation that they will be able to sell it for more than it is being purchased for. There are gold stocks that exist in the stock market that can be bought by purchasing shares of a gold mining company. Here, there is the advantage of investing in a company that can hedge its bets and potentially invest in other metals as well. Gold ETFs are also common and can be bought when an investor does not want company risk.
Silver on the other hand has more price fluctuations than gold due to a handful of factors. Not only is silver used as a metal commodity for value but it is also more heavily used in other industries. Historically, it was used in the photography industry but today it is used more frequently in the technology, biocide, and jewelry industries along with many others.
Silver investments are shown to heavily rely on supply and demand making it a much more volatile investment. Often, the price of silver increases when mining strikes occur since the supplies are less available, but the demand is still high. Likewise, as technology continues to change and developments occur, silver holds a higher demand at times and a lower demand at others, making the value constantly shift.
There are a handful of ways to make profits in the silver market. Silver bullions can be bought and sold directly and can trade in a large range of quantities. They are market matchers and follow the value of silver quite closely allowing investors to reap the benefits of the silver market. Silver mining stocks and ETFs are another type of asset that investors can buy and sell to engage in the silver market. Silver streaming companies act as futures and offer mining companies cash for silver from a mine that is not yet in production. Often times the company pays a low price for the silver and can then sell it for a profit in the future.
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When trading metals, there are many different options that are all potentially profitable with the right money management plan. Most commodities hold their values well and can make them good hedges against volatility from traditional assets. From offering cash flows to being instated as long-term holds, gold and silver are strong commodities that strengthen your portfolio.