There are several factors that affect price fluctuation and that can cause volatility in the precious metals market. One of the most important factors is global financial institutions, whose investments are speculative in nature and can cause upward or downward price movements. Another factor that influences the market is the end-user trends, mainly triggered by jewellery buyers. In general an increase in demand for jewellery causes precious metal market prices to rise. Economic conditions also have an impact on market prices.  Changes in demand for some other financial assets apart from precious metals also contribute to price fluctuations.

Precious metals can be traded in both directions If the market is expected to move upwards trades can be entered by purchasing a metal via a CFD (going long) and exit the trade by selling the metal.  If there is anticipation of a downward movement, trades can be entered by selling a metal via a CFD (going short) and exit the trade by buying the metal. The ability to trade in both directions allows investors to gain profits (but also to sustain losses) regardless of upward or downward market movements.