Understanding Precious Metals

Precious metals such as gold and silver have always been used to pay products and products directly and indirectly. They are standardized and traded by both hedgers and speculators worldwide. Hedgers use metal contracts to protect inventories while speculators trade contracts to take advantage of market inefficiencies.

All contracts specify metal weights in troy ounces. A troy ounce weights 31.10 grams.

Gold is the most important precious metal. It is denser than cheaper metals, resistant to erosion and has a beautiful golden color. The two most significant applications of gold are jewelry making and coins/bullion.

Silver is more widely available than gold thus is cheaper. It is a shiny white metal and a better conductor of electricity than copper. However, silver is prone to tarnish in air. Thus makes silver less desirable for bullion than gold.

ACM Precious Metals Analysis