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Precious Metals Trading Explained

this video is about precious metals

we're going to be looking at silver and

palladium and platinum and we're going

to be talking about what affects those

markets what uses those metals have and

we'll also look at some examples of how

to invest or to trade in those metals so

do keep watching to the end of the video

so that you get to hear about all that

hello I'm Peter Martin with trading to

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well in the previous video we talked

about gold and we said that that was one

of the most well known commodities

almost as well-known is silver and just

like gold silver has at times in history

been used to back paper money so let's

begin by talking about silver let's

begin by talking about silvers

properties many of which are similar to

the properties that we mentioned about

gold in our previous video first of all

silver is a lustrous metal it's a shiny

white metal it polishes up nicely that

would have contributed to its value

since ancient times it's also highly

conductive and it's soft it can be

easily shapes it's malleable it's dark

tile which means it can be drawn

outstretched and it's also pretty rare

but it is more abundant than gold and in

fact if you look at how much is mined

each year in 2018 it was about 27,000

tons of silver that remind that compares

with about 3,300 tons of gold so roughly

about eight times as much silver being

mined in 2018 then there was gold so

let's run through some of Silver's uses

that stem from those properties we've

just been talking about and we have

jewelry here just as with gold because

of its rarity its lustrous nurse and

it's easy malleability and ductility

silver has long been used to make into

different types of jewelry so also as

quite significant use as silver cutlery

fine cutlery it's also used to silver

plate musical instruments we have

coinage and historically silver has had

a major usage in coinage although gold

has a long history of use as money

before that silver was a widespread type

of coinage on which much international

trade was based in the UK in fact and he

moved to the gold standard in the 18th

century and only officially in the 19th

century having previously utilized a

silver standard and then medicine silver

actually has antibiotic properties that

makes it very useful to use in various

types of dressings for wounds and it can

be used in invasive medical applications

and also in dentistry in amalgams silver

historically had a major use in

photography for photographic emulsions

that has dwindled considerably with the

advent of digital photography of course

and then at the bottom here we have

electronics which is a major use for

silver because of its high electrical

conductivity is very useful in

electrical connectors and it's also used

to a significant degree in solar panels

what I thought might be interesting is

to compare the price of silver to the

price of gold so here we are in trading

two ones whose webapp at the top of the

screen we have a weekly charts for spot

silver and at the bottom of the screen

and weekly charts for spot gold and they

both go back the same amount of time

they both go back to July 2015 and we

can see over that stretch of time that

the two charts are broadly the same

shape suggesting that there has been

some correlation over this stretch of

time which is interesting as they are

subject to slightly different factors

for example a much higher proportion of

the silver mined each year goes into

industrial uses them as the case for

gold we look at the current price we can

see that gold is much more valuable than

silver gold is trading around about 1483

14 $84 per ounce and silver at seventeen

point six dollars per ounce so gold

worth about 83 84 times as much as

silver currently let's move on now to

take a look at some more precious metals

let's take a look at platinum and

palladium now I am just because I don't

have unlimited time going to lump these

two together a bit so we're going to

look at platinum and palladium at the

same time which isn't ideal because

there are some major differences but

there are also some quite significant

similarities now they are both much more

recently discovered than either silver

or gold which have been known since

antiquity with palladium only being

discovered in the early 19th century

they're both silvery soft metals that

can and have been used in jewelry

platinum more so than palladium

historically although palladium is

commonly added to gold nowadays to make

white gold today a major factor for both

is that they behave as catalysts in

certain chemical reactions and that see

as they speed up certain chemical

reactions stemming from that they're

both used in catalytic converters in the

auto industry and that has been

significantly driving usage of these

metals particularly palladium in fact

more than 80% of all palladium that is

mined each year ends up in catalytic

converters and in recent years the value

of palladium has increased substantially

let's talk a little bit about supply of

platinum and palladium both are

extremely rare when we talked about how

much silver was being produced in recent

years saying roughly 27,000 tons per

year with gold it's more than 3000 tons

per year in recent years with both these

metals somewhere in the region of

roughly 200 tons per year being mined

out of the ground a significant amount

is also recycled from catalytic

converters but we can see how much more

rare these metals are in terms of what's

being mined than gold or silver and the

vast majority

of palladium is mined in just two

countries Russia and South Africa

dominating mining of palladium and South

Africa dominates by itself mining of

platinum and concerns over demand

outstripping supply have seen palladium

eclipsed gold in value recently so once

again here we are in the webapp looking

at all four metals that we've been

talking about on this chart here silver

and gold at the bottom weekly charts

there and at the top platinum and

palladium platinum we can see he's

currently run about nine hundred and

forty dollars per ounce and therefore

much more valuable than silver but

significantly lower in value than gold

currently palladium though up at

seventeen fifty four dollars per ounce

is significantly more expensive than

gold

and it's been pushing upwards all the

way back into 2018 we can see how its

values rocketed there and has been

eclipsed in gold in that period let's

quickly look at an example of placing a

trade on spot silver here's a chart of

spot silver we can see that the price is

currently around about eighteen dollars

and that it dipped down to around about

seventeen dollars an ounce there at the

end of September so let's open a

detailed trade box and we can see the

sell and the buy price I'm going to put

in my quantity is a hundred and I'm

going to put in a stop loss one dollar

away down at just above seventeen

dollars per ounce so let's confirm by we

can see I'm risking just under seventy

eight pounds so just to quickly run

through the numbers of what we've set up

in this example we were buying silver

it's a spot silver CFD because this is a

CFD we could have gone shorts as well if

we thought the price was going to fall

but in this example we bought which

means we expect the price to rise we

brought a hundred a hundred watts well a

hundred troy ounces of silver as a price

of eighteen point o2 nine dollars per

troy ounce put a stop in at seventeen

point o2 nine dollars per troy ounce

which means that if we were stopped at a

stop level we would lose $1.00 per ounce

and we did a hundred ounces so

a loss of $100 pound against the dollar

exchange rate is roughly

1.29 and so my account being denominated

in sterling this shows as being around

about 78 pounds

so let's complete the example by looking

at a theoretical closing so here's my

opening we bought a hundred eighteen

point zero two nine dollars per ounce

let's say that silver rises I'm lucky

enough to get it right and I sell at

eighteen point seven seven nine so it

just goes up a little bit and that's the

sale price when I come to close my

profit therefore is my closing level -

my opening level which is new point

seven five dollars per ounce and

multiply that by the hundred ounces I've

got and I make a profit of seventy five

dollars at an exchange rate around about

one point two nine that is worth around

about fifty eight pounds of profit

obviously you need to take into account

funding costs for any number of days

that you've held the position overnight

so that was looking at trading silver

using a CFD you can also invest in

precious metals by getting involved in

the stock market one way would be to

invest perhaps in mining companies that

run mines in the particular metal you're

interested in or a more direct way would

be to use ETFs exchange traded funds a

number of silver ETFs are available with

trading - one - and you can also gain

exposure using ETFs to platinum and

palladium so here we are in trading two

ones whose webapp again this time we're

in the investment part of the app and

I've created a watchlist pertaining to

some precious metals that we've been

talking about got a couple of silver

ETFs in there and I've got this one here

is called wisdom tree physical platinum

in this one the bottom is wisdom tree

physical palladium ETF and I put wisdom

tree physical palladium in the main

charts here and if I click on the I we

can see some information about that ETF

including the icing number which is

useful because you can google it and

read the specifics of that actual ETF

which is a

was an idea if you're considering

investing in an ETF just so that you can

judge whether that fund matches your

investment objectives the marketing

blurb for example for that fund reads

that wisdom physical palladium is

designed to offer security holders a

secured simple and cost-efficient way to

access the palladium market providing a

return equivalent to the movements in

the plating spot price less the

applicable management fee in comparison

the iShares silver trust for example

says that it offers exposures to the

day-to-day movement of the price of

silver bullion and the investment

objective of the trust is to reflect

generally the performance of the price

of silver as I say it's a good idea if

you're considering investing in one of

these to actually go and read the full

prospectus for that ETF I hope you

enjoyed this video looking at some

precious metals if you did please hit

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now for me Peter Martin and Trading to

want to thanks for watching I'll see you

next time goodbye