Precious metals are primarily traded over the counter (OTC) both as alternative investments to traditional currency holding, as well as for industrial usage in electronics and components. These include;
- Gold
- Silver
- Platinum
- Palladium
Metals
Precious Metals
Gold is the primary precious metal traded as a commodity, not just for its obvious aesthetic uses in jewellery, but also as a safe haven in times of heavy currency fluctuation. As currencies falter on the money markets, gold often tends to appreciate in value – making this an attractive investment for traders in times of economic volatility.
Trading of such metals may be physical or financial.
Physical trading will involve making or taking an actual delivery of a consignment of bullion. This will need to conform to the strict standards of quality and delivery will often be arranged through allocated or unallocated accounts.
Alternatively, traders can take on the risk and benefits of trading precious metals without the burden of physical ownership through exchange traded funds (ETFs). These track the value movement of the underlying metal, but there is no physical delivery as this is purely a financial equivalent.
Industrial/Base Metals
There are a number of base metals which although not precious in value, they are requisite in industrial processes and are traded as commodities. These include;
- Copper
- Lead
- Tin
- Zinc
- Aluminium
- Steel
- Nickel
Trading of such metals may be physical or financial.
Physical trading will involve making or taking an actual delivery of a consignment of metal. This will need to conform to the strict standards of quality and delivery will be to a nominated location.
How we can help?
Whether it is helping to configure new markets into your existing CTRM system, or whether it’s an initial assessment of the functionality required to commence trading in a new commodity or area, Belbridge Consulting can provide you with expert guidance gained from many years of hands-on experience in these complex markets.
By utilising our knowledge and expertise to supplement your internal project teams, you can be assured that your business and technology teams are able to both understand the needs and the pitfalls of these markets but also to translate the abstract terms into real meaningful requirements that are unique to your firm and its operational processes.
A solid understanding of how these commodity markets will truly affect the day to day trading and operational processes within your firm will ensure that your project team has the best possible information in order to deliver the right solutions and to allow your firm to extend its trading footprint without creating undue operational breaks and manual exception processing.
“Like Liberty, gold never stays where it is undervalued.” — John S. Morrill