Copper, being a fundamental metal utilized in various manufacturing processes ranging from construction to computer components, is often considered as a gauge of industrial activity due to its price fluctuations.
Commodity traders are increasingly using silver as a form of hedging against volatility in the currency markets, making it another popularly traded metal. Our spreads for silver start from a competitive 1.3 cents.
Gold is a commonly used safe haven commodity that investors often turn to in order to hedge against volatility in the US dollar. It is one of the most widely traded commodities in the world today, and our spreads for gold are competitively priced. For gold, our spreads start from just 1.2 cents.
Precious Metals Bars
Investing directly in gold bars is a popular way to access these markets. Bars come in many sizes to suit the needs of the investor. One of the largest markets for gold bars is organized in London. Here the standard size of bar is 400 troy ounces, which is referred to in the market as a large bar. Other bar sizes frequently used around the world include 100 troy ounces, 1 kilogram and 5 tael. The standard size for silver bars in the London market is 1,000 troy ounces. For platinum and palladium, the acceptable size in the London market is between 1 and 6 kilograms.
Taking direct ownership of precious metals often involves the use of specialist vaulting and custody arrangements, secure transportation and insurance coverage. In addition to direct investment, the London market has also developed a system of indirect investment.
Precious metals can be bought on an unallocated basis through a bank or intermediary. The bank retains control of the metal whilst the buyer holds the metal on account. Owning metal on an unallocated basis introduces an element of counterparty risk, but provides for a more straight-forward mechanism for completing transactions: trades are completed by the banks moving balances between account.
The London markets for precious metals are organized on a private, over-the-counter basis, without a central exchange coordinating trading. In a number of other locations around the world, exchanges have developed to provide trading facilities in metal. One of the most active of these is the Shanghai Gold Exchange, which provides a centralized spot market for gold and silver bars.
In addition to bars, investors looking for a direct investment in physical gold and silver can also buy coins. Many countries mint coins from gold and silver, and there are many private markets and agencies that support this form of investment.
Another popular way to invest in precious metal is through a mutual fund or an exchange traded fund. This is an indirect form of investment, where investors place their assets into a fund and in turn the fund invests in metal. The fund charges a management fee to cover its costs. With an exchange-traded fund, equity in the fund is traded on a stock exchange, with the most active of these funds being listed in New York and London.
Technology is widely used in the trading arrangements for all these products. A new development that is emerging is the is use of blockchain technology to support the ownership and the efficient transfer of precious metal.
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