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Trading Metals That Don’t Rust

by | Tips & Strategies

In the rush to find the next hot product filed under the much-memed acronym NFT, many traders are passing up the old classics – gold and silver. While they may not be able to get these metals to rust, new market participants are seeing if gold and silver can break as they move investment out of traditional vehicles and into newer assets like Bitcoin and whatever an NBA Top Shot technically is (DISCLAIMER: I own three NBA Top Shot Moments).

If It Ain’t Broke…

Opinions on the future of investing aside, you cannot debate the fact that metals have been as active as ever in the last year of trading. Gold made a new all-time high in 2020,.* silver has shown some its highest volatility in years, and the pair have bounced back and forth for months allowing for opportunities to both buy or sell.

Rust Never Sleeps (SPRE vs Gold vs Silver)

Source: dxFeed Index Services (https://indexit.dxfeed.com)

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The Case for the Contrarian

Though metals have been knocked down several times in the past year, they’ve yet to be knocked out. Small Metals futures – gold, silver, and platinum in one product – have held above $70 since summer 2020, and they’re eyeing that level again.

Social media and talking heads have created an environment that asks you to draw a line in the sand and choose: Metals or NBA Top Shot. Why not both?

*Gold futures high on August 6, 2020 (https://cmegroup.com/)
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Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

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