Advanced Search

PRECIOUS METALS INFORMATION

Below you will see information on Precious Metal.

        

Here we will have a closer look at precious metals as investment - Gold, Silver, Palladium and Copper are all traded on the financial markets. All metals are mined and then refined via a series of processes. This purifies them and gives them specific value. But what is the background to these and how do they work on the markets?

Gold - the most popular metal investment

Gold is much sought after precious metal, and has been since earliest records. Today, it also a world safe haven for investors. As other markets fall foul of economic downturn, gold can be relied on as a hedge. Gold is always relied upon for its solid value, so in times of unrest or war, the demand rises.

How is Gold priced?

As you may know, gold was once used as a form of currency. After World War II, a gold standard was introduced, which meant the gold price was fixed at $35 per troy ounce - until 1971. Today, the gold price is benchmarked by London Gold Fixing, a meeting which happens twice each day by members of the five bullion - trading firms, also known as the Gold Pool.

Gold is borrowed and lent by central banks in a similar way to currencies. It has its own interest rate, which is usually lower than the main domestic interest rate. This means that it is slightly different to other commodities, although the main driving force on the gold market is still supply and demand.

Where is Gold and Silver traded?

Silver and Gold are both traded on the London bullion market - a wholesale market. Members - mostly large international banks and bullion dealers - of the London Bullion Market Association trade on this market.

Traders can invest in gold through the derivatives and shares markets, spread betting, or by directly owning gold coins or bullion.

View the Live Gold Price Trading Chart on our site

You can also view a more detailed account on the relationship between gold and currency prices here:

Why Does Gold Impact Currency Rates?

Krugerrands - Another way to Invest in Gold

What is a Krugerrand?

The Krugerrand was first minted in 1967 in South Africa. It is a gold coin which is today available in a range of sizes. It has a premium above gold. It is made up of gold and copper - it contains one troy ounce of pure gold. The reason for its creation was to aid the marketing of South African gold. It can be used as legal tender in South Africa.

Much do Krugerrands Cost?

A Krugerrand today costs around 250 per coin to buy. They are a popular way for first-time or small-time investors to enter the gold market. You can even buy them on eBay!

Silver

Like gold, silver has been used as a form of currency for thousands of years but is no longer used as legal tender.

Silver Price

In the silver market, historically the price is known to fluctuate and be of a volatile nature. The main trend in price is that it tracks the price of gold - indeed the ratio between the two precious metals is often tracked by investors. The price of silver rose in the early 21st century, but has been affected by the 2008/2009 global credit crunch.

What Affects the Silver Price?

Large Investor Tactics

The factors affecting the price of silver are varied - large events have caused price spikes, such as a well known event in 1980. The Hunt brothers famously tried to corner the market which caused the the price of a troy ounce to reach nearly $50.

Demand

Silver is used in a great many products in industry. It is therefore also in demand by non-investors.

Overall, it has been shown that silver follows gold in trends. Investors in the metal can physically buy silver in various forms - including certificates, exchange-traded funds, bars and coins - but can also trade it in an indirect way via spread betting and derivatives.

You can view the daily price of silver via our Live Silver Price Trading Chart

Copper

Copper is a metal that has many uses, the largest of which are in the construction industry. Like gold and silver, it has historically been used in currency and art.

How is Copper traded?

Copper is traded most often on the Futures market, and is actually used as a good indicator of the global economic situation at any given time. Very often, copper traders use copper Futures prices to decide where to invest in other financial markets and stocks.

How is Copper Priced?

The two main markets for copper are the London Metal Exchange in the UK and the New York Mercantile Exchange in the US. On the London Metal Exchange, copper is traded by 25-tonne lots, which are priced per tonne in US dollars.

On Comex, which is a division on the New York Mercantile Exchange, it is traded by lots of 25, 000 pounds. It is priced in US cents per pound.

When trading copper, things to look out for include any kind of social or political unrest in the country where it is mined - this can affect the levels of production.

View our Live Copper Price Trading Chart

The Platinum Group Metals - PGMs

Palladium and Platinum

Both platinum and palladium belong in the PGM group of elements

Palladium is a lesser-known precious metal, and was discovered in 1803. It is rare and also has a silvery-white appearance. It, along with platinum, is wildely used in manufacturing and as a catalyctic converter - this means it can convert harmful gases into less harmful substances.

Palladium and platinum carry many similarities - but palladium, being less-known, has a lower price.

Where is Palladium Traded?

Palladium is traded primarily on the New York Mercantile Exchange, being a precious metal. This is the main global base for Futures contracts on both palladium and platinum. Prices are quoted in US dollars and each Futures contract is worth 100 troy ounces.

Traders of palladium generally keep a close eye on the price movements of platinum at the same time - this is because the two metals are affected by one another.

Keep an eye on Palladium Prices

Platinum

Platinum is the main metal of the Platinum Group Metals. It is mainly used for jewellry. Other uses are, as for Palladium, for catalytic properties in the automobile, chemical and petroleum refining industries.

As with all precious metals, there is not an unlimited amount in the earth - and platinum is a metal of which there is a relatively small amount.

Where is Platinum traded?

Platinum is traded via world commodity exchanges such as the New York Mercantile Exchange and the London Stock Exchange.

Platinum Futures

Investors can buy platinum outright but a common way to invest is through Futures contracts. That way they are hedging the risks in the price of the metal.

On the NYMEX, platinum futures are priced in dollars and are traded in sizes of 50 troy ounces.

The price of platinum is, like all commodities, a changing factor. When economies are healthy and in growth periods, platinum can be worth much more than gold and silver, whereas in uncertain times it can drop in demand.

Back To Top

Keep an eye on our Live Platinum Price Chart

        


Please Note: www.whichwaytopay.com is not authorised to give advice under the Financial Services and Markets Act 2000.

All of the Links, textural data, and image data is provided for informational purposes only.

Click here to view our Disclaimer

 

 

 

 

 

 

 

News and ChartsNEWS / CHARTS

For once we are seeing Car Insurance Prices Drop since 2014
31 August 2018 - Which Way To Pay
A statement released last week , states that Car Insurance can be dropping by as much as 11% .
Read More >>
Is Everything covered for that Big Day ? Wedding Insurance
31 August 2018 - Which Way To Pay
Planning your wedding is one of the happiest times in your life , however we always need to make sure that we are covered for every penny spent . Wedding Insurance is a Must
Read More >>
Forever monitoring your endowment policy ?
08 April 2017 - Which Way To Pay
If this is your case then why not sell your policy on to make yourself some cash , and get what its worth.
Read More >>
Telephone Enquiries Helpline
+44 (0) 207 386 5300

Register for newsletter