A precious metal is a naturally occurring metal that holds high economic value because it is rare, durable, and used across investment, industry, and jewellery. The main precious metals traded in financial markets are gold, silver, platinum, and palladium.
Gold trades mainly as a store of value and safe-haven asset, while silver, platinum, and palladium carry stronger links to industrial demand. Precious metal prices move on interest rates, inflation expectations, US dollar strength, central bank policy, geopolitical risk, supply conditions, and investor sentiment.
You can take exposure through spot markets, futures, options, exchange-traded funds, mining stocks, bullion, or CFDs. Precious metals can diversify a portfolio, but their prices still swing sharply during major economic or market events.
You expect gold to rise because inflation stays high and the US dollar weakens, so you open a long position on XAUUSD, which represents gold priced in US dollars.
If gold rises from USD 2,350 to USD 2,400 per troy ounce, you profit from the higher precious-metal price. If it falls instead, the position loses value.