Precious metals are regarded as secure investments in times of market uncertainty, with investors choosing to diversify their portfolio and managing their risks through investing in precious metal options.

Gold and silver are often used to speculate the financial markets. Price fluctuations are difficult to grasp without proper comprehension of the markets and its fundamentals.

At Brickhill, we regard to gold and silver prices to be driven by its fundamentals:

  • Price movements of other commodities in combination with global demand for these commodities, “indirect pricing”.
  • Global inflation, in particular the US
  • Private physical demand and supply

How does
trading metals work?

Besides trading physical quantities, metals are commonly traded in the futures market, where future contracts are bought and sold for delivery on a future
specific date.

It may be traded in other sophisticated derivatives such as options that require a premium as an upfront cost and exchange-traded funds (ETFs), where a basket of different metals are traded in an investment fund, which is in turn traded like a stock in the stock exchange.

Metal Contract Specifications

Currency Pair Typical Average Spread
XAU/USD 0.5
XAG/USDF 0.04
Currency Pair Long Rate in Pips Short Rate in Pips
XAU/USD 3.35 -0.5
XAG/USD 0.07 -0.1
Currency Pair Minimum Contract Size Minimum Price Fluctuation Size of 1 Lot Used Margin Per 1 Lot
XAU/USD 0.01 Lot 0.01 100 oz 1% X 100 X Gold Mkt Price (in USD)
XAG/USD 0.01 Lot 0.01 5000 oz 1% X 5000 X Silver Mkt Price (in USD)