Precious Metals
Precious Metals Trading
As a long-term investment vehicle, trading and holding physical precious
metals has gained significant popularity among individual investors in
recent years. With a robust trading market, flexible trading methods, and
straightforward operations, both seasoned investors and newcomers to gold
investment can leverage these products to capitalize on lucrative profit
opportunities.
Spot Gold
Spot gold, often referred to as London gold due to its origins in London, is
a type of contract trading that employs capital leverage. Priced in "dollars
per ounce," transactions are settled in U.S. dollars. Unlike physical gold,
trading spot gold eliminates the need for extraction, thereby bypassing the
complexities of transportation, storage, inspection, and authentication.
Consequently, the spread between buying and selling prices is narrower than
that of physical gold. Currently, FTMO offers XAU/USD trading products.
Spot Silver
Spot silver, similarly known as London silver, is a leveraged investment
product that operates 24 hours a day, just like spot gold. The price of
silver is primarily influenced by the dynamics of supply and demand.
Recently, a supply shortage has bolstered silver's fundamentals, resulting
in greater price volatility compared to many other metals. FTMO also
provides XAG/USD trading products.
Both spot gold and silver are available for trading nearly 24 hours a day,
with a brief pause during market closure from 17:15 to 18:00 EST daily.
Why Trade Spot Gold and Silver?
Flexible Leverage: Up to 400:1
• Two-Way Trading: Opportunity to go long or short, supporting multiple
currencies such as the U.S. dollar, Australian dollar, British pound, and
Euro.
• T+0 Real-Time Transactions: Multiple transactions can occur within the
same day, ensuring high liquidity.
• Active Market: High price volatility creates numerous opportunities for
wealth generation.
• Transparent Market Information: Influenced by macroeconomic factors,
relevant news, and real-time economic data.
• 24-Hour Online Trading: Available from Monday to Friday, providing ample
profit opportunities.
•
Leverage and Margin Trading
Spot gold and silver trading utilizes a margin system, typically offering
high leverage. Many traders provide a leverage ratio of 100:1, allowing
traders to amplify their investment capital. For instance, if the price of
gold is $1,950 per ounce, trading 1 ounce under a 100:1 leverage requires
only a margin of $19.50. At FTMO, we offer leverage ratios of up to 400:1.
However, it is important to note that margin trading can magnify both profit
potential and risk.
Quotations and Spreads
The spot trading prices for gold and silver are quoted in the international
market as "dollars per ounce," indicating the dollar value of one ounce of
gold or silver. The minimum increment for gold is 0.01, while for silver, it
is 0.001.
For example, if the gold quotes are 1930.12/1930.57, it indicates that you
can sell one or more lots of gold at 1930.12 or purchase at 1930.57. The
spread, which represents the cost of the trade, is the difference between
the selling and buying prices (1930.57 - 1930.12), amounting to 0.45.
Profit and Loss Calculation
The contract value is calculated as the current price of gold (or silver)
multiplied by the number of transactions. For example, if you buy 1 lot of
gold (1 lot = 100 ounces) at a price of 1930.57 and later sell when the
price rises to 1960.98, your profit would be (1960.98 – 1930.57) x 100
ounces = $3,041. Conversely, if the price falls below 1930.57, a loss will
incur.
