Trading in spot metal market in a speculative manner gives the trader to have a good option to traditional means of investing in precious metals markets where substantial profits, as well as losses can be happened. Generally traded precious metals are gold bullion, coins, and mining stocks. These metal forms are treated differently according to its market value. Precious metal contracts are also valuable trading tools for commercial producers and the users of the above metals.
Trading of precious metals is similar to stock in the exchange. The traders conduct activities on behalf of their clients for buying or selling metals. Online trading is more convenient and easy, and have full and mini-sized contracts based on the quantity of precious metal.
There are two ways of trading in metals market, which include metals traded on the futures and spot markets. A contract of silver is 5000oz while contract of gold is 100oz. Spot metals contracts are normally sold or brought on a value date of 48 hours. This contract can also be rolled over on a daily basis thereafter. On the future contract, buying or selling is happening in a specific settlement date in the future. For example June Gold, can be bought in February for June settlement.
The trading with gold and silver rates is performed as it is done with foreign currencies, by the Over The Counter (OTC) method. More clearly, the trading is performed directly between the two involved parties, and not via a third party which consolidates the trade (such as an exchange market).Trading with gold or silver rates, as with foreign currency rates, is non-delivery trading, which does not require the “physical” purchase or sale of the “commodity”.