Metals are a class of commodity assets that are extracted from the ground. Metals will therefore include gold, silver, palladium, platinum and copper. These assets are listed for trading on the AG Markets MT4 platform.
The commodity contracts on metal assets are traded on a CFD basis; the physical metal assets are not held by the trader, and are not exchanged between buyer and seller or between dealer and trader. What is traded is the contracts which are based on the price changes for each metal as the asset value goes up or down on a daily basis.
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Structure of metal trading
Commodities are primarily traded using the open outcry system on the floor of the Chicago Mercantile exchange, operated by the CME Group. They are also traded on the electronic exchanges of the Chicago Board of Trade (eCBOT). The trading times for each of these trading sequences are different, so that on any given trading day, two trading times for metal trading are seen. It is important for traders to understand this as it will serve as a guide on how to trade metals during the period of maximum volatility.
Unlike many other platforms where metal trade contracts have expiration dates, trades on metals performed on AG Markets do not have an expiration and can be closed by the user at any time.
What do you need to start trading metals on AG Markets?
AG Markets offers traders the opportunity to trade metal assets on their MT4 platform. In order to trade metals on this platform, traders will need the following:
- A An account with AG Markets. This account should be funded with at least $5,000, so as to cater for the increased margin requirements.
- BAccess to advanced charting software for technical analysis.
- CAccess to market news which has specific significance to the metal assets being traded on AG Markets.
- DAn understanding of how to use the MT4 platform offered by AG Markets.
Metals are particularly sensitive to economic fundamentals. For instance, gold is sensitive to the state of the global markets and is traded on the basis of risk-on/risk-off sentiment. Silver is an industrial raw material used in several industries. Its value is a factor of demand and supply in the relevant industries.
Copper is primarily exported from Australia to China where it is one of the raw materials feeding China’s buzzing industries. News about manufacturing, growth (GDP) and industrial sentiment is a major factor affecting this metal. Trading metals will test the trader’s knowledge of world economics. Therefore, it is only proper that traders who want to trade metals pay attention to the educational materials available on AG Markets.