Commodity market analysis of gold and silver: Trading CFD metals

Want to know how traders use gold and silver as safe-haven assets and what drives their price movements? In this article on commodity market analysis of gold and silver, trading journalist Katerina Parpa shows you why these commodities are so highly valued, how to analyze the markets, read patterns, and master short- and long-term CFD metals trading strategies.

Gold and silver are often traded as a hedge against inflation and form a key part of many investors’ portfolios. In addition to their use in various industries (medical, electronics, and jewelry), these metals are also purchased as physical investments in the form of bullion. However, with derivatives such as CFDs, an investor can speculate in the gold and silver markets without owning the physical asset. 

In this guide, we’ll show you how to conduct a commodity market trend analysis while providing insights into how gold and silver are traded and showing you how the commodity market works in relation to precious metals. With a commodity trading technical analysis, you’ll learn how to trade gold and silver effectively.

Understanding the commodity market for precious metals 

A commodities market is simply a market where raw materials like precious metals are bought and sold. Once minted into currencies and prized for their rarity, these metals are still sought-after and are often considered a hedge against inflation—typically, if the dollar decreases, gold and silver increase.

Gold and silver are not just hoarded, though. They are used in various applications, including aerospace, electronics, jewelry, and medical supplies.

If you’re new to this space, our article How to trade commodities: A comprehensive guide for beginners walks you through the foundations.

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What is commodity market analysis?

A commodity trading technical analysis is a systematic overview of a commodity market designed to speculate on future price movements.

For instance, a commodity market analysis of gold and silver may consider current prices, ongoing availability, economic conditions, and geopolitical events to predict whether the price will rise or fall.

Although there are no guarantees, performing a commodity market analysis of gold and silver can give traders more confidence.

Importance of gold and silver in the commodity market

The combination of industrial application and perceived value makes gold and silver strong commodities that often flourish when other commodities and investments struggle.

In 2020, when the world’s markets were reeling from the effects of the pandemic, the price of gold soared by 27%. But the price can also drop. In 1999, gold hit a low over concerns that central banks were reducing their reserves, and there was also a dip in 2006.

Role of CFDs in metal trading

With contracts for difference, or “CFDs,” traders don’t need to hold any physical assets. This means they can speculate on the price of gold and silver without buying any bullion and worrying about the cost of holding it.

Commodity market trend analysis of gold and silver

To perform a commodity market analysis of gold and silver, you must consider various indicators, including the historical price, economic factors, inflation, and geopolitical tensions. Once you have all of this information, a commodity market trend analysis can help with price speculation.

Historical price trends of gold and silver

In 2025, both gold and silver climbed as investors sold other assets in response to tariffs and increased US-China tensions. Gold surpassed 3,000 USD an ounce for the first time and continued rising. 

Previous peaks include gold hitting 2,000 USD during the pandemic in 2020 and surpassing 1,800 USD in 2011, at a time when the US credit rating was downgraded and European stock markets were in free fall.

Silver passed 30 USD an ounce in 2025, but it has experienced higher peaks in the past. In 1980, during what became known as Silver Thursday, the Hunt brothers famously bought futures contracts and physical silver to corner the market, creating scarcity that saw the price rise to over 50 USD an ounce. Increased industrial and inflationary concerns also saw silver prices of nearly 50 USD an ounce in 2011.

A chart in the Exness Terminal showing the rising price of gold between 2022 and 2025.

Key drivers affecting metal prices

Always consider the following factors when conducting a commodity market analysis of gold and silver:

• Economic indicators: Precious metal prices usually move inversely to the US dollar, with investors seeing gold and silver as a safe haven when other investments are struggling.
• Inflation and interest rates: While inflation can increase the price of precious metals,  interest rate increases may have the opposite effect as investors seek more lucrative opportunities elsewhere.
• Geopolitical tensions: Global tensions cause investor concern. Investors may worry that political instability will impact currencies and stock market prices, increasing investments in commodities thought to guard against inflation.

Other factors to consider during a commodity market analysis of gold and silver include Central Bank reserves and mining production, both of which impact supply and demand.

To understand how risk and news events shape metals’ prices, check out Commodity trading news and analysis: Understanding commodities risk.

Current market sentiment and trends

Despite pulling back from recent peaks, gold and silver prices remain resilient as investors worry about the future value of the US dollar and the potential for interest rate cuts.

A commodity market analysis of gold and silver will highlight political instability and economic uncertainty, and may determine that now is a good time to invest. Remember, though,  every investment carries significant capital risk, and no one can accurately predict where the current political situation will lead or how it will influence commodity markets.

Commodity trading technical analysis for gold and silver 

Rather than trying to analyze geopolitical events, investors can also adopt a technical approach when creating a commodity market analysis of gold and silver.

Introduction to technical analysis in commodity trading

As the name suggests, a commodity trading technical analysis focuses on the technical aspects of the market. When conducting a technical commodity market analysis of gold and silver, you would analyze historical price charts and use technical indicators that can spot trends in these charts.

Popular technical indicators for gold and silver CFDs

The relative strength index, Moving Averages, and Fibonacci retracement are all key indicators in a commodity trading technical analysis:

• Moving Averages: The MA looks at the average price during a given timeframe. For example, in a five-period Moving Average,  the investor will look at all of the closing prices for the last five days. If they are analyzing intraday prices, whereby trades are opened and closed on the same day, they look at the current price as opposed to the closing price.

• Relative Strength Index: The goal of the RSI is to find the oversold and overbought levels to determine if the market has reached its highest or lowest price, known as “topped” and “bottomed”. The RSI uses a scale from 0 to 100, with a score over 70 judged as overbought and a score below 30 classed as oversold.

• Fibonacci Retracement: This indicator uses Fibonacci ratios such as 23.6% and 50% to find the most likely levels of resistance and support. Traders calculate the vertical distance between high and low points and divide it by Fibonacci ratios. If the price experiences a sharp increase or decrease and then retraces to one of these levels, it may indicate a changing trend.

For more depth on these tools, see Commodities technical analysis: Tips and techniques for CFD traders

A chart on the Exness Terminal with the RSI indicator applied.

Chart patterns to watch in precious metals

Traders use various chart patterns to speculate on the price of precious metals, including:

• Head and shoulders: A reversal pattern characterized by triple peaks, with the “head” peak in the middle being higher than the “shoulders” at the side. In an uptrend, this pattern can signal a reversal.
• Double tops: In this pattern, the price tests a high level twice, but doesn’t break through, suggesting a reversal.
• Double bottoms: An inverse of the double tops, with the price testing but not breaking two lows, indicating a bullish reversal.
• Ascending triangles: Higher lows create an ascending line while the resistance forms a horizontal line, indicating a potential rise above the resistance line.
• Descending triangles: An inverse of the above, with a descending line connecting lower highs and a horizontal line across the lows. It is typically seen as a continuation of a downtrend.

Comparing gold and silver as CFD trading instruments 

Gold and silver are influenced by similar market factors, but there are distinct differences between these two precious metals.

Volatility and liquidity differences

Gold has a larger investor base than silver, making it more liquid. Silver also has many more uses, creating more market volatility. 

As seen during Silver Thursday, silver is more susceptible to significant price shifts resulting from large trades. However, a proper commodity market analysis of gold and silver may determine that the latter is more suitable under certain conditions.

Risk-reward profile of each metal

Silver's volatility means it is subject to more extreme price swings, but this can also make it a more attractive prospect for traders seeking substantial short-term gains. If a trader conducts a commodity market trend analysis and correctly predicts that prices will rise, they could make a substantial short-term profit.

If the market goes in the other direction, however, their losses will be substantial.

Correlation between gold, silver, and the US dollar

A weak dollar usually creates strength in precious metal markets, with investors turning away from stocks and bonds and sinking their money into these so-called “safe-haven assets”. 

Silver and gold are also priced in US dollars, and China and India are among the world’s biggest consumers. When the dollar drops, these precious metals become cheaper for non-US consumers, making trading, investing, and consuming a more viable option.

Strategies for trading CFDs on gold and silver

In addition to conducting a commodity market analysis of gold and silver, CFD traders will consider these strategies:

Short-term vs. long-term trading strategies

CFD traders can use a commodity market analysis of gold and silver for both short-term and long-term trading.

Short-term trading comes with greater volatility, but may produce short-term gains following a successful commodity market trend analysis and strategy. Short-term traders will typically try to capitalize on recent or expected economic and geopolitical events, such as announcements that may impact the US dollar or change the interest rate.

The idea of an inflationary hedge comes into play in long-term trading. Long-term traders may put their money into gold or silver to support a large and diversified investment portfolio. They may also determine that precious metals are a more viable long-term solution during times of uncertainty, like at the beginning of 2025, when tariffs and trade wars dominated the headlines.

Hedging and diversification with metals

The notion that gold and silver prices move inversely to the US dollar is more than a simple correlation. As mentioned previously, there is clear causation between these two factors, and many reasons why traders will turn toward precious metals when the dollar is down.

This is where the idea of precious metals being a “safe haven” comes from. It’s also why investors choose to hedge and diversify their portfolio with gold and silver.

If, for instance, you have stocks and gold CFDs in your portfolio and the markets take a hit due to political instability, the gold may cover some of your stock losses and keep your portfolio strong.

Risk management in commodity CFD trading

Conducting a commodity market analysis of gold and silver is just one way that CFD traders can act smartly and protect their investments. They should also conduct proper risk management, including:

• Placing stop loss orders to sell commodities when the price drops below a certain point.
• Placing take profit orders to sell when the price hits a desired goal.
• Diversifying to ensure that a single economic or geopolitical event doesn’t wipe out their portfolio.
• Correctly sizing positions based on capital and desired risk exposure.

An active commodity trade with both stop loss and take profit orders on the Exness Terminal.

Global factors influencing commodity market analysis 

Global factors to consider in a commodity market analysis of gold and silver include:

Central bank policies and their impact

The monetary policies of the central banks have a major impact on a commodity market analysis of gold and silver. These policies control interest rates, and if they increase those rates, savers get more money from their savings accounts and investors receive a greater yield on bonds. In such times, individuals are more likely to turn away from gold and silver, which don’t produce a yield.

Conversely, if central bank policies create uncertainty and reduce the yield on savings accounts and bonds, the price of precious metals may rise.

Supply chain and mining output

Gold is one of the rarest metals. It’s thought that just over 240,000 metric tons have ever been discovered, compared to the billions of tons of iron and the millions of tons of copper mined every year. With only a few thousand tons being added to the pile annually, it’s an incredibly rare metal, but it could still be subject to fluctuations if mining output changes.

Around 25,000 metric tons of silver are produced a year, and as a lot of this is used in industrial applications, a mining shortage can lead to increased demand and sharp price rises.

Either way, mining output and its impact on the supply chain are central to any commodity market analysis of gold and silver.

Currency fluctuations and trade policies

As gold and silver are traded in US dollars, currency fluctuations can greatly impact the amount that is bought and sold, which in turn affects the price. Trade policies, on the other hand, create uncertainty and could increase the risk of inflation or disrupt supply chains.

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Final thoughts 

Traders often see gold and silver as safe-haven assets, with the price rising when currencies, shares, and yield-investments fall. To judge current and future prices, they can conduct a commodity market analysis of gold and silver, considering factors such as historic prices, economic and geopolitical events, central bank policies, and mining output, while also using chart patterns like ascending and descending triangles to spot patterns.

Many experts believe that gold and silver deserve a place in every portfolio, whether for hedging and diversification or in anticipation of economic and political turmoil. In such cases, both metals CFDs and physical investments are suitable. Just remember, every investment carries a significant capital risk, and that’s as true for gold and silver CFDs as it is for anything else.

To trade  precious metals CFDs, sign up for an account with Exness. You can get started with a demo account to test the waters with virtual funds.

Frequently asked questions for commodity trading analysis

What is commodity market analysis?

Commodity market analysis is the study of commodity prices, market trends, and external factors to understand future price movement. A commodity market analysis of gold and silver often combines fundamental factors like economic data and geopolitical events with technical analysis tools such as trend lines and chart patterns.

How to analyse the gold market?

To analyse the gold market, traders often combine fundamental analysis (such as economic indicators, a weakening US dollar, and geopolitical developments) with commodity trading technical analysis. Looking at past price patterns, closing prices, and technical indicators like moving averages helps investors predict future price moves and adjust their investment objectives.

How to identify commodity market trends?

A commodity market trend analysis involves tracking current price trends alongside economic trends, global events, and supply-demand shifts. Traders use technical indicators, trend lines, and market sentiment to spot whether commodities like precious metals, crude oil, or agricultural commodities are gaining strength or losing momentum.

What is a technical analysis of the commodity market?

Commodity trading technical analysis focuses on price action and chart patterns rather than external fundamentals. Traders evaluate past price patterns, moving averages, and RSI levels to anticipate price trends in precious metals, soft commodities, and energy assets like natural gas or crude oil.

What is the correlation between gold and silver in commodity markets?

In the commodity markets, gold and silver often move in the same direction because both are viewed as safe-haven assets when economic uncertainty rises. A commodity market analysis of gold and silver shows that gold prices typically lead, with silver following the price trend but showing higher volatility in international markets.

What happens to silver when gold goes up?

When gold prices rise due to economic uncertainty or geopolitical events, silver often follows the same market trend, but with greater volatility. This happens because market participants view both as precious metals with similar investment objectives, but silver’s wider use in tangible goods and industrial demand can create sharper price moves.

Which indicator is best for commodity trading?

There isn’t one “best” indicator, but traders often rely on Moving Averages, RSI, and Fibonacci retracement when conducting a commodity trading technical analysis. These technical indicators help identify trending markets, oversold conditions, and potential false signals across commodities such as precious metals, crude oil, and agricultural goods.