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Precious metals have primarily been useful as a stable store of value, not a way to make a profit The best argument in favor of precious metals has generally been that they hold their value against inflation while being hard to manipulate by governments/central banks/currency traders/etc. But that's not an investment - that's just a store of value. There's ...


20

As long as I can buy it today and sell it at a date of my choosing Typically investors don't purchase shares representing indefinite ownership of commodities, instead they are traded as futures. Oil Futures have a settlement date, i.e. they expire and you have to buy them again. Let's take a look at NYMEX WTI Light Sweet Crude Oil futures. Here we can ...


6

Gold stocks (and ETFs and mutual funds comprised of gold stocks) are a reflection of the price of gold during that period. There are years when they are the best or near best performers among all funds. There are years when they are the worst or near worst performers. There are years when they are the just blah and trade in a box. You can see this by ...


4

Is it possible to trade these commodities on the stock market? No. Commodities are traded in a commodities market. Stock markets are for stocks. Please do a lot of research prior to executing trades it is akin to options investing. However you can trade companies that benefit from increasing prices in oil and gas. For example Exxon or for a more ...


2

The SGBS (USD denominated) product is there to appeal to large institutional investors who keep large amounts on USD at hand and wish to trade gold. (Private, retail investors with USD in their account may also choose SGBS). The SGBX (GBP denominated) product is there to appeal to mainly private, retail investors in the UK who wish to trade gold but do not ...


2

It's dead simple, since you are starting with pounds, just get the pound one. At the end, you can just take pounds out. If you went with the USD one, you'd have to "change twice". Thus, they're simply offering the pound one as a "convenience to you" - so to speak. (Note that inside their enterprise, they essentially "change on every transaction" in some ...


2

Leverage is not necessary with a futures contract. The entire cash value of the underlying commodity can be held in the account. Well, the account will note the amount of margin used from the free balance but the investor can certainly be proven to be unleveraged by the cash balance. In fact ticker USO is a fund that accounts positions in oil using futures ...


1

I know how margin trading works, but I want to understand why it is so common in the futures markets. Because with futures, unlike stocks, you do not exchange cash upfront, therefore leverage (without any margin account) is infinite. Say you "buy" an oil futures contract at $50. You do not pay $50 for this and then sell it for the current price of oil - ...


1

The price is vulnerable to the inscrutable politics of Saudi Arabia. In 2016 they defied all expectations of $100 to $85 WTI oil in order to put the shale oil industry out of business, taking the price down to $24. And still they failed to put the shale oilers out of business. Now they are driving the price down to hurt Russia? With out-of-left-field ...


1

Unfortunately there's not a simple answer since "crude oil" is a very broad spectrum. From the supply side, oil is produced in multiple locations across the globe, and with varying properties (e.g. "sour" crude contains more sulfur and thus is cheaper, but requires special equipment to be usable to refineries. It can also be traded between countries, so ...


1

Current oil storage is not due to the premium of selling oil to future dates but is due to reduced demand for oil. The first situation sells long-term futures contracts while holding physical oil and benefits from contango. The second situation sells short-term contracts because the second situation is looking for immediate delivery dates. But an investor ...


1

An etf or fund that had to physically store and redeem a wide range of commodities would be both extremely expensive and completely impracticable in many cases. Are you just going to buy and hold physical pork bellies or orange juice for a decade for example? Who is going to buy 10 year old frozen foodstuff with a dubious storage history when you want to ...


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With contango, a long-term futures contract will decline to the spot price as the time winds down. So an advantageous position would be to hold the sell-side of a long-term futures contract while also holding the physical commodity. And here storage of the physical commodity is the effective business practice. With backwardation, a long-term futures ...


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Many exchanges create contracts in the hope that one day someone might trade them. Until someone does, there are no prices. All the palm oil futures trading happens in Malaysia, and there is no compelling reason (so far) for anyone to trade it on the CME instead. Remember that, even if the monetary terms might be identical, the contracts on the two ...


1

One claim to fame of Larry Williams is the Williams %R Indicator. In reality, it's the inverse of George Lane's Stochastic Indicator so he didn't really invent anything at all with this indicator. Larry Williams also wrote a book about the COT Report. Out of curiosity, I took a quick look and found this explanation: https://freecotdata.com/how-to-use/ ...


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The fundamental problem with investing in precious metals is that the price is entirely driven by supply and demand. By the definition of "precious," none of the product is permanently consumed. In the case of gold, most of the "consumption" is jewellery manufacture, and as the far eastern countries' economies develop and gold jewellery ceases to be the main ...


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