In financial and commodity trading contexts, "metals" refer to a broad category of raw materials and commodities that are mined from the earth. These metals are essential for industrial processes, manufacturing, construction, and even as investment vehicles. Here's an overview of the main types of metals traded in financial markets:
Known for its value as a store of wealth and its industrial applications, gold is traded globally as a commodity and is often used as a safe-haven investment during times of economic uncertainty
Used in industrial applications (such as electronics and photography), jewellery, and as an investment similar to gold but with higher volatility
Economic growth, industrial production, and technological advancements impact demand for metals. Supply factors include mining output, geopolitical stability in mining regions, and environmental regulations.
Since metals are priced in US dollars on global markets, currency fluctuations, particularly the strength or weakness of the US dollar, can affect metal prices.
Metals are traded on commodity exchanges worldwide, such as the London Metal Exchange (LME), Chicago Mercantile Exchange (CME), Shanghai Futures Exchange (SHFE), and others.
Traders can buy and sell futures contracts on metals, which involve agreeing to buy or sell a specified amount of metal at a predetermined price and date in the future.
Metals are also traded in the spot market, where immediate delivery (usually within two business days) of the metal occurs at the current market price.
Widely used in construction, electrical wiring, electronics, and industrial machinery. Copper prices are sensitive to global economic conditions and infrastructure spending.
Lightweight and corrosion-resistant, aluminium is used extensively in manufacturing, aerospace, automotive industries, and packaging.
These metals are also vital for various industrial applications, including batteries, alloys, and coatings.
Understanding the dynamics of metal markets, conducting thorough research, and staying informed about global economic trends are essential for investors and traders looking to participate in the metal commodities market effectively