Guide for beginner traders. Metals trading

  • 15/12/2023

Metals such as gold and silver have a rich history of use as a medium of exchange, store of value, and investment asset. They attract the attention of traders with their stability and demand in the market. At the same time, metals have unique characteristics that make them interesting objects for analysis and trading.


Metals trading provides traders with many opportunities for profitable trading and investing. In this article, we will look at various aspects of metals trading, starting with an overview of the different types of metals and their characteristics as financial assets.

Why do traders choose metals as a trading instrument?

Metals attract traders for several reasons:

  • Diversity of assets. There is a wide variety of assets available in the metals market, allowing traders to select options that suit their strategy and goals.
  • Portfolio diversification. Investing in metals serves as a means of diversifying an investment portfolio.
  • Inflation protection. Precious metals such as gold and silver are often seen as safe haven assets against inflation and economic instability. Traders use them as a tool to preserve the value of capital.
  • Liquidity. Most metal markets are characterized by high liquidity, which allows for prompt entry into transactions and their closure.

Overview of metals available for trading

  • Gold. This precious metal is known for its stability in times of crisis, making it a desirable asset for diversifying investments.
  • Silver. Despite its lower cost compared to gold, silver is in demand as an investment asset due to its wide range of industrial uses.
  • Platinum. A rare metal that is used in the automotive and jewelry industries. This makes it attractive to investors.
  • Copper. Copper’s key role in electrical engineering makes it an important economic indicator reflecting the health of the industry.
  • Aluminum. Lightness and strength make aluminum indispensable in the transport and construction industries, as well as in packaging production.
  • Zinc. The main use of zinc is to protect steel from corrosion, which plays a key role in the construction and automotive industries.
  • Nickel. Essential for the creation of alloys and batteries, nickel plays an important role in modern technology and energy.

Metals market analysis

Analyzing metal markets is the key to success in trading. Let’s look at the main elements of fundamental and technical analysis of these markets, as well as the indicators and tools traders need to make informed decisions.

Fundamental Analysis

Fundamental analysis is based on a thorough study of the factors that determine the supply and demand of metals. Key fundamental aspects include:

  • Economic data. Traders track economic indicators such as GDP, consumer price index (CPI) and manufacturing activity to understand the current state of the economy and potential demand for metals.
  • Geopolitical events. Conflicts, trade wars and political events can affect metal prices. For example, instability in metal-producing countries could lead to a reduction in supply.
  • Seasonal factors. Some metals are subject to seasonal fluctuations in demand, such as holidays or construction seasons.
  • Macroeconomic events. Central bank decisions on interest rates and exchange rate policies also affect metal prices.

Technical analysis

This method is based on studying past price data and trading volume to predict future price movements. Technical analysis of metal markets includes the following aspects:

  • Price charts. Analysts use price charts and candlestick patterns to identify trends and key support and resistance levels.
  • Indicators. Technical indicators such as moving averages, relative strength index (RSI) and stochastic oscillator help assess whether metals are overbought or oversold and predict trend reversals.
  • Trading strategies. Using technical analysis data, traders develop trading strategies, including tactics based on reversals, breakouts and long-term investments.

Based on their trading strategies and investment goals, traders determine how to choose between fundamental and technical analysis, and consider combining them for more effective trading.