OFB clients and traders, who wish to perform spot trading with gold or silver rates, will regard the gold (XAU) and silver (XAG) just as they treat any other foreign currency, however - the trade is done only against the US dollar (USD). This facility provides hedging opportunities, to maximize exposure to minimum risk. As a precious metals trader can hedge physical stocks at only 1% margin of the total cost if purchased physically.
The trading with gold and silver rates is performed as it is done with foreign currencies, by the OTC method (over the counter). That means that the trading is performed directly between the two involved parties, and not via a third party which consolidates the trade (such as an exchange market).Trading with gold or silver rates, as with foreign currency rates, is non-delivery trading, which does not require the "physical" purchase or sale of the "commodity".
|Spot Gold||XAU/USD||40 Cents|
|Spot Silver||XAG/USD||3 Cents|
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