What metals trading means here
Precious metals trading usually means trading price changes in gold, silver, platinum and palladium. Online, most traders do this through CFDs. A CFD (contract for difference) is an agreement to exchange the difference between the opening and closing price of a position. You never own the metal.
Metal CFDs are quoted against a currency. XAUUSD is gold in US dollars and XAGUSD is silver in US dollars. Some symbols quote gold or silver in other currencies, such as XAUEUR or XAGEUR, so the currency also moves the price.
The metals and what moves them
| Metal | Symbol | Main uses | What often moves the price |
|---|---|---|---|
| Gold | XAUUSD | Jewellery, central bank reserves, investment bars | US interest rate expectations, the US dollar, inflation data, demand for safe assets |
| Silver | XAGUSD | Industry (electronics, solar panels), jewellery, investment | Gold's direction plus industrial demand. Silver often moves more sharply than gold |
| Platinum | XPTUSD | Car catalytic converters, industry, jewellery | Car and industrial demand, mine supply |
| Palladium | XPDUSD | Mainly petrol car catalytic converters | Car production, supply from a small group of mining regions. Prices can jump on supply news |
Liquidity is not the same across these metals. Gold is usually the most liquid. Platinum and palladium usually trade with wider spreads and can gap more. The spread is the difference between the buy and sell price.
Contract sizes and position value
A lot is the standard trade size, and for metals it is defined in troy ounces. Gold and silver lots hold different amounts of metal, so the same lot size on XAUUSD and XAGUSD gives a very different exposure. Contract sizes can also differ between brokers and account types.
Always read the contract size in the symbol specification. In MetaTrader, you can open it from the Market Watch window. Then use the pip value calculator and the margin calculator to see what a price move and a position will cost before you trade.
CFD trading vs buying physical metal
- Ownership: a CFD gives you price exposure only. Physical gold or silver is an asset you hold, store and can sell to a dealer.
- Leverage: CFDs are traded on margin. Margin is the deposit that keeps a position open, so a small price move can wipe out much of your deposit. Physical metal has no margin call.
- Direction: a CFD can be sold short, which means opening a trade that gains if the price falls. Physical metal only gains if the price rises.
- Costs: CFDs have spreads and overnight swap charges (see swap fees). Physical metal has dealer markups, making charges and storage costs.
- Price in Pakistan: local tola prices include the rupee exchange rate and local premiums. See gold in Pakistan.
Leveraged CFD trading can lose money fast, including the whole deposit. Metals can move sharply around US data releases and when markets are thin.
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How to use this section
If you are new: start with trading basics, then read the XAUUSD gold page, because most metal guides build on it. Practise in the practice simulator before you trade real money, and read risk management.
If you already trade: the XAGUSD silver, XPTUSD platinum and XPDUSD palladium pages cover volatility, sessions and specification details. The gold/silver ratio page explains how traders compare the two metals.
Legal position in Pakistan: read law and regulators before you open any offshore account. In short, per the SECP, offshore forex/CFD platforms operate without regulatory approval in Pakistan, and per the SECP, offshore platforms have no Pakistani licence or oversight and offer no legal protection or recourse.
Frequent questions
Is a gold CFD the same as owning gold?
No. A CFD only pays or charges the price difference. You hold no metal and cannot take delivery.
Why does silver move more than gold?
Silver's market is smaller, and industrial demand adds another source of price swings. Exposure per lot also differs, so check the contract size.
Do metal CFDs have overnight charges?
Usually, yes. A swap is charged or credited when a position stays open overnight. See swap fees and check the current swap in the symbol specification.
Is trading metal CFDs through offshore platforms allowed in Pakistan?
On offshore products, per the SBP, the purchase of offshore forex/margin/CFD products by Pakistani residents violates section 4(1) of FERA 1947. Also, per the SBP, remitting foreign exchange to overseas forex/margin/CFD platforms is not allowed through any payment channel (FERA s.5(1)). Read law and regulators for details.
Where should a beginner start?
Start with trading basics, then the XAUUSD gold page. Use the calculators before you place any trade.
