From a statistical point of view, the prices of gold and silver change approximately simultaneously. But more important is the ratio of gold and silver prices and its trends.
Let's look at this graph.
Gold/silver ratio: 27 years of data – silver is cheap (in green), silver is too expensive – (in red)
1. Over the past 27 years (since the 1980 bubble and subsequent correction), there has been a downward trend in the gold-silver ratio.
3. Silver price lows in 2003, 2008, and 2013 were at or above the trend lines I depicted in this chart. The price of silver has risen strongly since reaching ratio peaks in 2003 and 2008. I expect similar dynamics after recent attitude spikes.
4. The magnitude of the ratio may fall over several months or decline slowly over several years.
My takeaways from this chart are that the gold to silver price ratio is at the high end of the range, long-term silver prices are gradually rising relative to gold, and a run-up in prices for both metals is possible at any time or in the coming years.
What else can you learn from the graph?
Let's take weekly silver prices (solid line) and weekly gold/silver ratio (dashed line) and smooth them with a 7-week simple moving average. This cuts off some of the “noise” from the graph. Let's plot these weekly data back to 2002, roughly the start of the gold and silver bull market. Let's look at the graph.
1. It can be seen that the price of silver usually moves in the opposite direction of the ratio. This simply says that the price of silver goes up and down faster than the price of gold, but they usually move together.
2. The ratio has risen over the past 3 years to levels seen in 2008 and 2003, prior to periods of significant silver price increases.
3. Now the gold/silver ratio is high - over 66.
Statistics
- From January 2002 to May 2014 (more than 12 years), the correlation coefficient between the curve with the weekly leveling of silver prices and the same leveling of the gold/silver ratio was equal to 0.65 with a minus sign.
- From May 2008 to May 2014 (6 years from the beginning of the crisis), the correlation coefficient between the price of silver with weekly smoothing and the price ratio with weekly smoothing was equal to 0.90 with a minus sign - a fairly strong negative correlation.
- The average weekly data on the smoothed gold/silver ratio over the past 12 years is 59.9, with a standard deviation of 9.24.
- Based on data from the last 12 years, the ratio is above average, with a standard deviation of 0.77.
- Similarly, based on data for 6 years after the crisis, the ratio is above average, with a standard deviation of 0.86.
Based on the ratio data and statistics, we can conclude that:
1. The gold/silver ratio is now high and is in the zone of the 27-year trend line, when it is quite possible to expect silver prices to rise and the ratio to begin to decline.
2. Silver prices rise and fall with gold prices, but silver prices rise faster than gold prices.
3. The gold/silver ratio is noticeably higher than the average for the last 6 and 12 years (standard deviation 0.8), and is likely to decline. Therefore, the price of silver is likely to rise in a few months.
Fundamentals
There is great demand for gold - from China, Russia and India. Western central banks have "leased" some (or most) of their gold. German gold held at the New York Federal Reserve has not been returned, possibly because it is no longer in the vaults. See analysis Julian Phillips about this theme. If most of the central bank gold is gone ("leased" to the market), soon demand will outstrip the supply of real, physical gold. High-frequency traders can crush the paper market, but not forever.
There is reason to believe that gold, with a price about 40% below its 2011 peak, and with demand rising and supply shrinking, will rise strongly in price over the next few years. The price of silver will follow the price of gold, but will rise stronger and faster given today's low price and oversold conditions. Was the above analysis conclusive evidence that gold and silver prices should begin to rise? Obviously not!
But he points to the facts:
- The correction in silver prices lasted more than three years. Growth can begin at any moment.
- Gold prices are now high relative to low silver prices - the ratio is at the top of a 27-year trend and is likely to decline.
- Silver prices have fallen faster (since April 2011) and will rise faster than gold prices. When the price of silver eventually takes off, it will bring the ratio down a lot - likely to around 30.
- Many other signs (not shown here) also suggest that silver is very low, oversold and ready for a rally. The same is true for gold.
Investor demand for silver and gold bars and coins is high and growing. I think silver and gold prices will rise by the end of 2014, and will be significantly higher by the next US presidential election.
The pieces of paper that we mistakenly call money will lose value in the coming years. Take this chance and turn paper money into physical silver while high frequency traders and central bankers give you artificially low prices for silver and gold.
Light silver in color, quite heavy (in its pure form), soft and malleable.
Silver has been known to mankind since prehistoric times, since previously it could often be mined in open (pure) form, without bothering with smelting the ore. To impart hardness, silver is often alloyed with other metals such as copper.
The Russian name for the metal comes from the ancient languages of Asia Minor, where “surbaro” meant “pure” or “brilliant.” By the way, the Latin “argentum” has the same meaning.
First silver deposits were discovered by ancient civilizations in Sardinia, Babylon, Assyria, Mesopotamia, etc. Now this metal is mined in South America, Canada, USA, China, Kazakhstan, Russia, Australia, Czech Republic, Germany and many other countries. The undisputed leaders in silver production in the world are Peru (about 3.5 thousand tons per year) and Mexico (about 3 thousand tons). In Russia, about 600-700 tons of silver are mined per year, mainly by the Polymetal group of companies, which, in addition to silver, also mines gold.
Use of silver.
Of all the noble metals, silver has the widest range of applications. It was so in ancient times, and it is so now. At the same time, the scope of its application is constantly expanding.
The main areas of industrial and other activities where silver is used are the following:
- Electronics.
- Electrical engineering.
- Jewelry industry.
- Photo.
- Precision instrumentation.
- Rocket science.
- Medicine.
- Pharmaceuticals.
- Decorative arts.
- Investments.
Each of these areas has many sub-items that we will not consider, as well as some other areas of application - such as, for example, religion or magic.
Silver price dynamics.
When buying an ordinary silver chain for some amulet, the average consumer does not even imagine what role this seemingly far from the most expensive metal played in the history of the world economy and financial system.
However, low silver price will not deceive an experienced financier. Likewise, gold, which is considered the standard in the system of international currencies, is far from being the most expensive metal. Platinum, for example, is significantly more expensive. Thus, the extremely rare californium-252 costs up to 10 million dollars per 1(!) gram, and osmium-187 costs about 10 thousand US dollars per gram. Platinum ranks third, and gold only fourth. As for silver, it is in 12th place in this ranking, inferior (in order of value) to the following rare metals - rhodium, palladium, iridium, osmium, rhenium, scandium and ruthenium.
Silver was the first precious metal to become the primary currency for financial transactions in ancient times. The main role in this was played by the factor of an ideal balance between the value of the metal itself and its prevalence. Gold was also common, but its higher cost played a negative role. If you wanted to buy a small piece of meat, then you had to make gold coins so tiny that they could easily be lost. Therefore, silver coins became an ideal option.
Britain became the main financial center of Europe in the 10th century, where payments took place in a monetary system tied to silver. The silver standard at that time (925 standard) was produced by German industrialists (the Easterling Silver company, that is, “Eastern Silver”).
In the 12th century, the main currency in Britain became a coin pegged to the pound (just under 453 grams) of the company's silver. This is how the name “pound sterling” arose - as an abbreviation for Easterling.
The development of British industry and the emergence of colonies (essentially raw material appendages of the British Empire) also contributed to the growth of its economy. Large industrialists and bank owners (oligarchs of that time) appeared in the country, for whom silver became an inconvenient standard for mutual settlements due to the large volumes of this currency. They began to switch to payments in gold.
Since the 17th-18th centuries, the gradual displacement of silver from the standard of the world financial system began. Then a new coin appeared in Britain - the golden guinea. This destabilized the market, as the peg to another metal caused fluctuations in the exchange rate of the guinea against the pound. Imagine if today the ruble was equal to 105 kopecks, and yesterday it was 98 kopecks.
Under these conditions, the British scientist Isaac Newton set a rigid exchange rate for gold to silver - 1 to 15.5. For a certain time, the market stabilized, but this was not part of the plans of the British (and a little later, American) oligarchs. They saw a new source of income not simply in the transition to a gold exchange standard, but in the replacement of gold with banknotes - essentially, paper backed by gold, while the metal itself continues to be stored in the same place (and no one will really be able to check whether the gold is still there, or whether it has already been sold, pledged, paid for, and so on). A gradual transition of settlements from secured money to fiat, or symbolic, paper money began.
The final withdrawal of silver begins at the end of the 18th century and lasts about 100-150 years. The abolition of silver dollars by the United States in 1783 caused the collapse of medium and small businesses not only in America itself, but also in many of the British colonies tied to the silver standard. All the silver thrown onto the market at once depreciated to a third of its value, and many ordinary people became poor. As for the initiators of the abolition of silver, their income, on the contrary, has increased significantly. At that time, many countries used the Mexican silver dollar as a currency standard (that is, a conventional unit) (such as China). These states did not suffer much during this crisis, since Mexico refused to cancel silver.
However, the influence of the United States and Great Britain in the world grew, and, in the end, Mexico switched to the gold exchange standard. Since then, this country has been steadily under US influence.
The transition of the countries of the world to the gold exchange standard meant, in fact, the transition to the pound sterling standard, which ensured unprecedented stability for Britain in the face of any economic shocks.
This transition of standards was least affected by China, which only in 1935 switched from the silver standard to the standard of its own currency (yuan), the USSR (it did not succumb to influence due to its banal isolation from the external world economy) and some other countries.
At the beginning of the twentieth century, there was a gradual, even imperceptible transition of the world financial system from the gold standard to the pound sterling standard. Papers began to rule the world (that is, banknotes became the main currencies, and coins made from precious metals began to fade into oblivion).
After the Second World War, Britain experienced serious economic shocks associated with the destruction of most production facilities by German bombs. Many industrialists and financiers moved to the United States, which was not affected by the war. In the late 40s - early 50s of the last century, the world switched from the pound standard to the dollar standard. The American currency has become the basis of the global financial system.
During all this time, the price of silver fell steadily. It went from a ratio of 15 to 1 with gold to a ratio of 44 to 1. And at the moment, this ratio is approximately 66 to 1.
The exception was the gold crisis in 1978, when silver sharply rose in price from 4-5 dollars per troy ounce to almost 22 dollars, as well as the rise during the 2008 crisis, when silver rose in price from 7 dollars to 20 (and in 2011 - up to 33) dollars per ounce.
Investing in silver.
Investing in silver are not suitable for making quick money (most often they are not suitable for making any money at all). However, many stock and financial experts consider silver to be the best hedge against inflation and an ideal way to save money.
The fact is that, although silver was forced out of the global financial system (gold at least remains a reserve currency), the huge industrial potential of the silver metal will not allow it to fall in price for a long time. And the growing demand for silver in various industries may even increase its price on the stock exchange. The arithmetic average of silver prices over the past half century shows the most stable result.
There are also more optimistic silver price forecasts. Some financiers believe that his time has not yet come. The possible transition of the world order from unipolar to multipolar has the possibility not only rising silver prices, but also a return to Newtonian standards - 15 to 1. In any case, even if these forecasts sound fantastic, most experts predict a slight rise in silver prices in 2016 and an increase in its demand by the end of 2017.
Precious metals have been popular since ancient times. If earlier gold coins were used as money, now gold is used as a reliable investment. Precious metals have a major advantage over currencies and stocks. Unlike the latter, they cannot depreciate in value and there is no likelihood that the precious metal will become cheaper than currency. According to the gold price chart, some exchange rate dynamics are still present.
The basic discount price for precious metals is set at a meeting of the largest banks in London. The process of setting the price is called “fixing” and is carried out twice a day. The Exchange may only be closed during international holidays. Fluctuations in the gold price can occur due to many factors. One of them is fluctuations in exchange rates, since the “metal” exchange directly depends on the foreign exchange exchange.
The cost of gold is calculated in American dollars. In each country, the exchange rate is converted into the national currency. The unit of measurement for the precious metal is the troy ounce. It contains approximately 31 grams of pure gold. Therefore, the Central Bank of Russia is converting the quotes that were established in London into rubles, weight – from ounces to grams, while adding some premium for logistics.
Change in gold rate over 10 years (USD/1 troy ounce, London fixing):
Using the gold chart over a long period, you can determine the general trend of the exchange rate. Recently there has been an upward trend. To be more precise, it has been observed in the last 12 years. There were minor jumps down, but they quickly changed in the opposite direction.
Price changes
Setting a certain price on the precious metals exchange began back in the 18th century. Then the price was set in the USA. The original price of gold was 19.35 US dollars per ounce. Since then, a lot has changed in the economy and politics of states, some even changed their borders. However, all prices that have been set since then have been recorded and archived.
If you take a graph of growth or decline in gold prices and compare it with a graph of changes in exchange rates, you can conclude that gold is more stable than currency. Even though he is under her influence. But both are an important part of the financial system around the world.
Gold, as a precious metal, is durable. Therefore, over time it does not rust or age. Based on this, gold is also an excellent industrial material. It is also used for soldering metal and electrical contacts. If you disassemble an old computer, you can collect several milligrams of pure gold from it. Only 10% of the world's gold reserves are spent on industrial expenses.
Dollar (shown in black) and gold (shown in yellow).
The rest of the gold reserve belongs to central, national or commercial banks of different countries, or is owned by private individuals. For the most part, banking structures influence the schedule of changes in the basic value of gold.
Investing in gold reserves is one of the most reliable investment instruments. The exchange rate of precious metals periodically decreases, but the price still levels out. Gold is rising in price. The American dollar, if you look at the long-term chart, is much less stable in terms of maintaining its value compared to precious metals.
Gold is the most reliable investment in the long term.
World reserves
Ancient gold coins that were used as money prove the fact that gold will always have value. The golden age was in the 19th century, when all currencies were measured in gold. Back then, people exchanged paper banknotes for gold.
At the moment, the reserves of state central banks amount to approximately 31 thousand tons of pure gold. The extraction of precious metals continues, meaning the global supply is increasing. When gold production remains at the same level, and demand unexpectedly increases, the rate dynamics go into the negative. And the chart of changes in the main discount price of gold depicts a sharp decline.
Sometimes precious metals miners make a smart move. If the gold price remains the same for a long time or intends to go down, gold mining companies underestimate the volume of gold production. The supply on the metal market decreases sharply, but the exchange rate remains the same or even higher. According to the well-known laws of the market and economics, the price of a product rises.
In order for the price to remain the same, it is necessary that a balance be maintained between supply and demand. That is, as demand increases, supply increases. Then the dynamics of gold prices will remain virtually unchanged. The graph in this case will show a straight line.
Factors of exchange rate change
The fact that gold is not only a precious metal, but also a reserve means of payment shows that it depends on the economies of countries. If a country is experiencing economic instability, or there is some kind of political crisis, then the interest in gold reserves in that country will fall. The demand for gold will decrease, then the quotes of precious metals will go down, and the charts will show a decline.
In addition, periodic declines can be observed during national holidays. Then there is a rush in the retail sale of gold jewelry. People buy gold jewelry as gifts and as investments.
During times of global crises, the gold rate may rise. This is due to the fact that investing in gold seems to be the only way out for citizens to preserve capital in times of unstable economic times. in this case, gold is the most reliable investment.
As noted above, the schedule for changes in the exchange rate of precious metals, namely gold, is closely related to the schedule for changes in the exchange rate of the US dollar and other currencies. Over the past few months, a decisive upward movement in the US dollar has been observed. The exchange rate of the Russian ruble is declining. Therefore, there is a strong difference between the rate that is set in London and the one offered by the Central Bank of the Russian Federation.
If a decline has been observed in the international rate of precious metals, then in the national rate of Russia an upward trend can be noted.
Chart of changes in the world price of gold XAU in US dollars per troy ounce (31.1034768 grams) USD/oz
Chart of changes in the world price of gold (30 days)
Chart of changes in the world price of gold (per year)
Gold rate for the last 5 years
Gold rate over the last 10 years
Silver price
XAG silver rate for 30 days in US dollars per troy ounce
XAG silver rate for the year in US dollars per troy ounce
XAG silver rate for 5 years in US dollars per troy ounce
XAG silver rate for 10 years in US dollars per troy ounce
Platinum price
XPT platinum rate for 30 days in US dollars per troy ounce
XPT platinum rate for 5 years in US dollars per troy ounce
Read articles about gold and other precious metals in the section Precious metals
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Noble metals are metals that are not subject to corrosion and oxidation. All of them are also precious metals due to their rarity and correspondingly high prices. The main noble metals are gold, silver, as well as platinum and the other 5 platinum group metals - ruthenium, rhodium, palladium, osmium, iridium
Gold is perhaps the first metal with which humanity became acquainted.
Origin of the name gold
Proto-Slavic *zolto (Russian gold, Old Slavic gold, Polish złoto) is related to Lit. geltonas "yellow", Latvian. zelts “gold, golden”; with different vocalism: goth. gulþ, German Gold, English gold; further Skt. hiraṇyam, Avest. zaranua "gold", also Skt. hari "yellow, golden, greenish", from the Proto-Indo-European root *ǵʰel- "yellow, green, bright". Hence the names of the colors: yellow, green.
Physical properties
Pure gold is a soft yellow metal. The reddish hue of some gold products, such as coins, is given by impurities of other metals, in particular copper. In thin films, gold shows through green. Gold has exceptionally high thermal conductivity and low resistance. Gold is a very heavy metal. A liter bottle filled with gold sand weighs approximately 16 kg. The heaviness of gold is a plus for its extraction. Gold is very malleable and malleable. Therefore, in jewelry, gold is always alloyed with copper or silver. The composition of such alloys is expressed by the breakdown, which indicates the number of parts by weight of the precious metal in 1000 parts of the alloy.
Chemical properties
Gold is the most inert metal, standing in the series of stresses to the right of all other metals; under normal conditions, it does not react with most acids and does not form oxides, due to which it was classified as a noble metal, in contrast to ordinary metals, which are easily destroyed by the environment. Gold also dissolves in mercury, effectively forming a low-melting alloy (amalgam).
Geochemistry of gold
Gold is characterized by its native form. Among its other forms, it is worth noting electrum, an alloy of gold and silver, which has a greenish tint and is relatively easily destroyed when transferred by water. In rocks, gold is usually dispersed at the atomic level. In deposits it is often enclosed in sulfides and arsenides.
Gold is used in industry and as a material for jewelry and in dentistry.
Gold prices
Gold is the most important element of the global financial system, since this metal is not subject to corrosion, has many technical applications, and its reserves are small. Gold was practically not lost during historical cataclysms, but was only accumulated and melted down. Currently, the world's bank reserves of gold are estimated at 32 thousand tons (if you fuse all this gold together, you will get a cube with a side of only 12 m). Gold has long been used by many peoples as money. Gold coins are the best-preserved antiquities. However, it only became established as a monopoly monetary commodity in the 19th century. Until the First World War, gold was the measure of all world currencies (the period 1870-1914 is called the “golden age”). At this time, paper bills served as proof of the presence of gold. They were freely exchanged for gold.
In 1792 in the USA it was established that 1 ounce of gold contains $19.3. In 1834, the price per ounce was already $20.67, since the United States did not have sufficient gold reserves to cover the entire volume of issued money, and the exchange rate had to be reduced.
After World War I, devaluation continued. In 1934, 1 ounce of gold cost $35. Despite the economic crisis, the United States tried to maintain a fixed peg of the dollar to gold, for the sake of this the discount rate was raised, but this did not help. However, due to the subsequent wars, gold began to move from the Old World to the New, which temporarily restored the dollar's peg to gold.
In 1944, the Bretton Woods Agreement was adopted. A gold exchange standard was introduced, based on gold and two currencies - the US dollar and the British pound sterling, which put an end to the monopoly of the gold standard. According to the new rules, the dollar became the only currency directly linked to gold. The US Treasury agreed to exchange dollars for gold to foreign government agencies and central banks at a rate of $35 per troy ounce. In fact, gold has turned from the main to a reserve currency.
In the late 1960s, high inflation in the United States again made it impossible to maintain the gold peg at the same level, and the situation was complicated by the US foreign trade deficit. The market price of gold began to significantly exceed the officially established one. In 1971 the gold content of the dollar was reduced to $38 per ounce, and in 1973 to $42.22 per ounce. In 1971, US President Richard Nixon abolished the dollar's peg to gold, although this step was officially confirmed only in 1976, when the so-called Jamaican floating exchange rate system was created. This meant that gold ceased to be a currency at all, and the dollar became a reserve currency. After this, gold became a special investment commodity.
Measures of gold purity
British carat system
Traditionally, the purity of gold is measured in British carats. 1 British carat is equal to one twenty-fourth of the weight of the alloy. 24 carat gold (24K) is pure, without any impurities.
To change the quality characteristics of gold, alloys with various impurities are made for various purposes (for example, to increase hardness). For example, 18 karat gold (18K) means the alloy contains 18 parts gold and 6 parts impurities.
Russian sampling system
The system adopted in Russia differs from the global one. In Russia, the purity of gold is measured by its fineness.
The fineness ranges from 0 to 1000 and shows the gold content in parts per thousand. Thus, 18-karat gold corresponds to 750 purity. 996 purity gold is considered “virtually pure” and is used in jewelry. Gold of higher purity is extremely expensive to obtain and is used only in chemistry.
Quotes and aphorisms about gold, silver and other precious metals:
All that glitters is not gold.
You are dazzled by the gold that glitters in the house of the rich; you certainly see what they have, but you don't see what they lack.
Aurelius Augustine
It is true that at fifty you can rarely count on reciprocity in love, but it is no less true that at this age you can have a lot of it for fifty gold pieces.
George Gordon Byron
Gold has killed more souls than iron has killed bodies.
Walter Scott
Money is freedom forged in gold.
Erich Maria Remarque
PS: as we see from the quotes, the word gold has become a common noun, and is often synonymous with the words money and wealth.
Silver on the exchange is the most popular instrument among commodity traders after oil and gold. In actual manufacturing, this metal is used to make tableware, coins, jewelry, and medical devices.
Silver rate on the stock exchange right now - Live Chart
The silver rate on the exchange differs from the market and the exchanges themselves. Below in front of you silver futures chart on the New York Mercantile Exchange COMEX:
Silver price against the US dollar:
Silver cost on the European Commodity Exchange EUREX:
The liquidity of silver cannot be called excessive. The same gold is several times faster than its younger brother» according to this indicator. However, the volume of transactions and the rate of silver allows the implementation of any approaches associated with small trading volumes.
The silver chart reflects the rate online and is adjusted according to different timeframes. On these online silver charts, you can apply or connect indicators.
After the millennium, silver entered a strong upward trend, which was supported by the same explosive growth in gold prices. In 2011 this trend has ended, and the strongest has begun correction, which very quickly developed into a protracted downward trend. Gold held out until 2013 and also began to fall rapidly.
But unlike the yellow metal, silver on the exchange suffered a much greater decline. from 50 dollars dropping down d about 14-17, before the price curve could flatten into a sideways movement.
Minute Forecasts for Silver:
Today it is impossible to give clear forecasts for silver in the long term. On the one hand, quotes for this valuable metal have fallen much lower than other non-ferrous metals and now have some undervalued.
- If the upward trend resumes, then the potential for an explosive upward movement here is much higher than that of the above-mentioned GOLD instrument.
- On the other hand, gold can continue its correction, smoothly turning it into a downward trend. In this case, silver will follow its “big brother” down.
Both probabilities are quite realistic. It is less likely that current levels will remain in place for long. A strong movement is brewing in the raw materials market and sooner or later it will happen.
general characteristics
Silver is traded in dollars per troy ounce. Futures contracts typically contain 100 units of the underlying instrument.
- That is, at a price of $14, the futures will cost $1,400.
Forex traditionally features crushed lots, which allow you to buy one troy ounce. The currency exchange uses a ticker SILV or quotation XAG/USD. The ticker symbol for the nearest silver futures contract on the COMEX is: SI1!.
The extremely high volatility of this instrument allows for aggressive trading and profiting from wide price movements. Silver is dependent on gold and determines its dynamics along with the general mood in the commodity market.
What affects the price of silver on the stock exchange and what do quotes depend on?
The main fundamental factors influencing silver prices are pace mining and production. Often manufacturing companies deal with several valuable metals at once ( for example, like Polymetal Corporation). Considering that silver has similar applications and production capacities to gold, it is easy to understand why their prices move in tandem.
The main silver miners in the world are:
- Germany
- Spain
- Mexico
- China
- Canada
- Australia
- Poland
- Russia
- Kazakhstan
At the same time, there are seasonal fluctuations associated with high growth in jewelry.
Such events include the wedding season in India, where gold is preferred as a gift, resulting in a shortage of jewelry made from precious metals in the market. The resulting vacuum is filled primarily with silver, which is reflected in the growth of its market value.
Financial problems and bankruptcies of major producers are driving up silver prices accordingly. Accordingly, a surplus of producers, as well as new extraction methods and advances in chemistry, may force prices fell.
Trading silver is really interesting. First of all, you need to learn to withstand deep stops and corrections. It is normal for this instrument to remove the risk control, and then return 2-3% back within the day. Therefore, this tool is not the best choice for novice traders who decide to practice in the commodity market. It's much better to start with gold, or .
An established sideways direction allows the use of indicators such as counter-trend trading on. Insufficient liquidity for this instrument will be noticeable on the 15-minute chart. At the same time, you can already work on a watch. As mentioned above, stops need to be set very wide so as not to fall into the so-called “saw”, when the change in stock from stop orders exceeds the change from directed transactions.
It takes place in completely different markets. In addition to deliverable futures, there are also settlement ones, as well as currency quotes on Forex and derivatives.
Silver trading example
The biggest benefit we can get from buying a binary option on silver is - 70% per transaction. After looking at the forecast for silver and comparing it with our own analysis, we decided to purchase an option with a forecast of price growth from a broker with whom we have been working for many years.
We have chosen the asset:
Since an option is a derivatives market instrument (has an expiration date), we set the option expiration time to 13:45:
To make money on an option, you need to specify a condition - whether the price of silver will be higher or lower at the time the transaction is closed. We have specified the condition UP, because they believed that silver would rise in price:
The option will close in 39 minutes if the price rises at that time ( no matter how much, at least 1 cent) as we indicated, we will receive 73% profit from the investment amount.
The deal was closed and here is the result:
The silver rate increased, and we earned $58.4 in net profit.
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