When beginners first enter the precious metals market, they often make wrong decisions because they confuse different products. Data from 2025 shows that 38% of early losses come from not understanding the products correctly. Knowing the main differences between products is the first step to avoiding mistakes.

1. Paper Gold: “Account Gold” Is Not Physical Gold

Paper gold is basically an account-based trade offered by banks. You cannot take out physical gold from it.

In 2025, ICBC and Bank of China both made it clear that if you want physical gold, you need a separate physical gold account, and the fee for taking out gold can be as high as 3% to 5%.

Paper gold is also not “low risk.” The spread can change with market conditions. During high-volatility times like U.S. non-farm payroll data, the spread can reach $0.8 per ounce. Frequent trading can easily eat into profits.

2. Spot Silver: “T+0 Trading” Does Not Mean Unlimited Trading

Although spot silver can be bought and sold on the same day, many platforms have set position limits since 2025, such as 500 kg per account, plus holding time limits. If a position is held for more than 30 days, an overnight fee of 0.02% per day is charged.

Some investors have lost 12% of their profits in 30 days just because they ignored the overnight fee.

Also, “spot” does not mean physical delivery. It is basically a contract for difference, and it only differs from futures in terms of delivery rules.

3. Silver Futures: Leverage Can Magnify Profits

Silver futures, such as Shanghai silver futures, only require an 8% margin. This may look very profitable, but it also greatly increases risk.

In 2025, strong demand from the solar industry caused silver prices to swing by 3.2perounceinoneday.Onecontractcouldmakeorloseasmuchas

3.2perounceinoneday.Onecontractcouldmakeorloseasmuchas4,800.

Another common mistake is forgetting to close a position, which can lead to forced delivery and a 1.5% penalty.

4. Trading Costs: The Spread Is Only the Beginning

Precious metals trading also has several hidden costs:

• Paper gold: about 0.3% annual account management fee
• Spot silver: 0.1% to 0.2% deposit and withdrawal fee
• Silver futures: 10 yuan per contract delivery fee

Beginners often only pay attention to the spread and ignore these fees. As a result, their total costs can be 20% to 30% higher.

5. Beginner Advice: Check the “Three Basics” First

Before trading any product, you should first understand these three things:

• Can it be physically delivered?
• What are the overnight fee rules?
• What are all the cost items?

In 2025, regulators required platforms to show this information clearly on the homepage. Beginners should first choose platforms with clear labels and start with paper gold or gold ETFs, which have no delivery pressure. After they become familiar with how trading works, they can slowly move on to more volatile spot and futures products.