Basic Knowledge for Bullion Trade
What is bullion
Bullion usually refer to gold, silver, or other precious metals in the form of bars, ingots, or specialized coins.
There are many types of Bullion related investment instruments all over the world.
There are many types of Bullion related investment instruments all over the world.
In Rakuten Securities Bullion, we provide Spot Gold/Silver trading services with a reliable investment environment and competitive trading cost.
Factors that affect precious metals price
Interest rates
The gold price is sensitive to interest rate movements.
Under normal circumstances, there is a negative relationship (=correlation) between gold and interest rates.
Under normal circumstances, there is a negative relationship (=correlation) between gold and interest rates.
Worldwide demand and supply
Growing demand and constrained supply can push precious metals prices higher. As an industrial metal, silver’s price may be moved by new technologies.
US dollar movement
Since international gold/silver is dollar denominated, any weakness in the dollar will push up the prices and vice versa.
Geopolitical factors
During geopolitical events, gold usually does well. During crises, various asset classes will have a negative impact but there is a positive impact towards gold as it acts as safe-haven investments.
Bid/Ask spread
The spread is the cost in bullion trading which refers to the difference in the bid and ask prices for a given precious metals.
GOLD
SILVER
Initial margin
In order to open a new position, available account equity must exceed initial margin level requirement.
The initial margin level requirement is 0.5%(leverage ratio 200:1) of open positions value.
The initial margin level requirement is 0.5%(leverage ratio 200:1) of open positions value.
GOLD
lots × contract size(oz) × market price(US$) × Margin Requirement (0.5%) = Initial margin
Example of gold:
0.1 lot x 100oz x US$1788.00 x 0.5% = US$ 89.4
1 lot x 100oz x US$1788.00 x 0.5% = US$ 894.0
10 lot x 100oz x US$1788.00 x 0.5% = US$ 8,940.0
0.1 lot x 100oz x US$1788.00 x 0.5% = US$ 89.4
1 lot x 100oz x US$1788.00 x 0.5% = US$ 894.0
10 lot x 100oz x US$1788.00 x 0.5% = US$ 8,940.0
SILVER
lots × contract size(oz) × market price(US$) × Margin Requirement (0.5%) = Initial margin
Example of silver:
0.1 lot x 5000oz x US$26.20 x 0.5% = US$ 65.5
1 lot x 5000oz x US$26.20 x 0.5% = US$ 655.0
10 lot x 5000oz x US$26.20 x 0.5% = US$ 6,550.0
0.1 lot x 5000oz x US$26.20 x 0.5% = US$ 65.5
1 lot x 5000oz x US$26.20 x 0.5% = US$ 655.0
10 lot x 5000oz x US$26.20 x 0.5% = US$ 6,550.0
Profit/Loss calculation
GOLD
P/L calculation formula: Lots × Contract size(oz) × (Close price – Open price)= P/L (USD)
*Lots : +ve for buy order , -ve for sell order
*Contract size for Gold is 100oz per lot
*Lots : +ve for buy order , -ve for sell order
*Contract size for Gold is 100oz per lot
SILVER
P/L calculation formula: Lots × Contract size(oz) × (Close price – Open price)= P/L (USD)
*Lots : +ve for buy order , -ve for sell order
*Contract size for Silver is 5,000oz per lot
*Lots : +ve for buy order , -ve for sell order
*Contract size for Silver is 5,000oz per lot
Trading hours during public holiday
Trading hours may be altered according to the CME (the Chicago Mercantile Exchange Inc) Globex trading schedule. Please visit the link below for details.