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XAG USD Explained What Is XAG USD Understanding Silver Trading for Beginners and Pros

If you've ever thought about how silver is quoted in global markets, the answer is XAG/USD.<br><br>https://www.tradewill.com/en/forex

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XAG USD Explained What Is XAG USD Understanding Silver Trading for Beginners and Pros

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  1. XAG/USD Explained: What Is XAG/USD? Understanding Silver Trading for Beginners and Pros Why Understanding XAG/USD Matters If you've ever thought about how silver is quoted in global markets, the answer is XAG/USD. This trading pair specifies the price of silver in terms of the US dollar, and it is one of the most liquid, or actively traded, precious metals pairs in the forex and CFD market. Silver is more than just another shiny metal. It is a legitimate investment asset that has a two-sided purpose. On one side, it is an industrial workload used from electronics to solar panels. On the other side, it is a historical store of value that investors tend to buy during times of economic uncertainty. XAG/USD takes both sides of the equation into one quote, making it a useful trading tool for hedging, speculating, and diversification. forex trading To put it differently, if you are a professional trader, when XAG/USD often moves in rallies together with XAU/USD (gold) and provides a rough measure of actions going on regarding inflation and the strength of the US dollar. In other words, when inflation fears spur or the dollar weakens, silver often will rally as well with gold (or often an amplified price movement). For those who are new to this, here's an easier way to visualise it. Think of it like this: You have a silver coin. The US dollar got stronger, so the price of that coin in dollars usually goes down. The value of your silver hasn't changed; it's just

  2. that the dollar got stronger against the silver. Alternatively, if the dollar gets weaker, that silver coin is now worth more dollars. That's what XAG/USD is. The period from 2020 until early 2021 is a fantastic case study. The dollar gave up its strength when the pandemic occurred, and the Federal Reserve flooded the world with liquidity. What happened to silver? The price went from about $12 per ounce in March 2020 to nearly $30 per ounce by August 2020. That's a gain of 150% in a five-month period. Traders who understood the basic principles of XAG/USD and took positions before the price move were able to take a profit from this situation. The Basics of XAG/USD: What Does It Really Mean? Let's dissect the code. XAG is an ISO currency code for silver (its Latin name is "argentum"), whereas USD stands for US dollars. XAG/USD indicates how much 1 troy ounce of silver costs in US dollars. If you see that XAG/USD = 24.50 on the trading screen, this indicates that 1 ounce of silver costs $24.50, quite simple. However, when trading, there's more to it! fx trading In traditional commodity markets, silver commonly trades in standard lots. A standard lot is 5,000 troy ounces, which is an enormous amount of silver, which is why retail traders often trade through CFDs (Contracts For Difference) that allow for much smaller position sizes, for example, micro-lots, or even fractional amounts of silver with CFDs that make it available without the use of a warehouse space and capital.

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