CFDs on Spot Precious Metals (Spot Metals)

Precious metals and contract for difference (CFDs) on spot precious metals, are financial instruments that allow traders to invest and capitalise on prices moving up (going long) or down (going short) without the need to pay for ownership of the precious metal. Similar to trading FX, the trade takes place over the counter, removing the need for middlemen as the two involved parties can conduct their business directly.

There are several factors that affect price fluctuation and can cause volatility in the precious metals market. One of the most important factors are global financial institutions, whose investments are speculative in nature and can cause upward or downward price movements. Another factor that influences the market is the end-user trends, mainly triggered by jewellery buyers: the demand in jewellery makes precious metal markets prices to rise. Economy also has an impact on market prices. In a globally well-performing economy the level of wealth is directly correlated to the demand for gold and other precious metal jewellery: when investors search for investment options that present a higher risk, the prices of certain precious metals is lowered while the price of others rises. Last but not least, the changes in demand for some other financial assets apart from precious metals also contribute to price fluctuations.