The gold bubble, as it has been popularly known, couldn’t have burst at a better period of time like it did in this particular decade. The reason why gold has been taking the headlines as far as commodities trading is concerned is actually the fact that it has been on an all time high so as silver. There is no doubt that these two metals are one of the foundations of modern commodities trading and it is only fair to say on the evidence of what they have shown so far that they are indeed unbeatable. So what are some of the reasons that these metals have been widely preferred?
- Relative stability compared to other financial instruments
The stability of gold and silver has been put to the test quite a number of times and there is no doubt that the two metals have survived. When the United States lost its AAA credit rating and shares, equities and indices declined sharply, the price of gold futures remained extraordinarily stable so as silver. The amazing thing is that gold process continued to rise even when the entire market was in turmoil due to events in the world.
- There is a minimal risk in trading gold and silver
Although the risk of trading gold and silver is there, there is no doubt that it can be easily mitigated. The reason why this actually is the case is based on the natural nature of the commodity’s stability. For many investors it is relatively less costly to trade on gold and silver compared to other instruments purely because of the fact that it is easy to manage the risks.
- Gold and silver like any other commodity can be traded as a financial asset
In this particular regard, gold and silver futures can be traded in the open financial markets as instruments or financial assets. What this actually means is that you do not need to have the physical gold in hand to actually earn from it. In many financial markets – and particularly the Chicago metal exchange – the investors have found great pleasure in trading on gold and silver futures as part of their investment.
- Gold and silver are global commodities
The fact that gold and silver are global commodities actually means that you can trade them from anywhere in the world provided you have the capital to do that. There is every reason why there will be very good profits returns in investing on the two precious metals.
Michael Hastings is an editor at How to Trade Commodities where he specializes in gold and Silver Trading. Learn more.