Precious Metals – Is It A Good Investment?

Some precious metal prices seem to be always on the rise, regardless of the ebb and flow of the economic state. While they might decrease in price with a certain economic incident, they still hold their value in the market. 

Precious metals have physical properties that allow them to be used in different industries, such as electronics, jewelry, dental equipment, and even in the production of battery and nuclear energy. For these reasons, many people are driven into investing in precious metals. However, there are three questions that confuse anyone who is considering this investment idea. The first question is whether it makes sense to invest in precious metals or not? Which metal to invest in? And how can you start investing? 


Should You Invest In Precious Metals? 

Regardless of the state of the market, this question is a resounding yes. Precious metals are a great investment idea, especially for those individuals trying to save, in a smart way, for retirement. When saving fiat money you always end up losing value as the years go on. The main reason behind this loss in value is yearly inflation. The price of goods, around you, increase by approximately 2%, however, in some countries this may go into double digits; this results in a depreciating dollar. That is the reason why the folks at advise you to secure your retirement account in order to save money for retirement in a way that brings many tax benefits. Learning more about investing your money, wisely, will ensure peace of mind at retirement. 


What Is The Perfect Metal To Invest In? 

Diving deep into the world of precious metals, while you are still a beginner, is not a very smart move. Some metals are considered to be a safer investment option while you are still tiptoeing around this subject. Gold comes as the number one most-traded metals, followed by silver, platinum, palladium, and lastly copper. 

  • Gold keeps its leading position on the commodities market. 
  • Silver follows with its use in electronics, energy, medicine, and many more. 
  • Platinum, on the other hand, is mainly used for catalytic converters in cars and jewelry. The metal’s price is strongly affected by the varying demand. 
  • Palladium is extremely rare, even more so than gold and platinum. It has always been volatile, which is a double-edged weapon for profit-seeking investors. The most valuable use of palladium is preventing air pollution. It has been the strongest secret weapon in fighting pollution for ages. 
  • The copper comes last in this list as it’s rather inexpensive when it’s compared with other precious metals. However, it’s extremely important and can’t be replaced in different industrial uses and the production of many important types of machinery. Copper is used in the production of motors, generators, heat exchangers, and it is also used in the making of electrical and connecting wires. This goes back to the fact that it’s an extremely ductile metal with high conductivity.   


How Can You Invest In These Metals? 

When one first approaches this subject, it might seem pretty straight forward. You can invest by buying gold, silver, or platinum and selling it again for a profit. However, there are two different ways of investing. The first is when people buy the precious metal in its physical form, such as silver or gold coins, to store it. The other option is to buy stocks that are tied to the current value of the precious metal of your choosing. Buying precious metal ETFs means that the value of the ETF will be tied to the value of the precious metals; if the prices go up, the ETF value increases. The two upsides to investing in precious metals are the fact that it’s a physical commodity and it’s limited. While they are still mined every day, their availability rate isn’t growing drastically. The scarcity of these metals, or the limited quantity, makes your investment more valuable. 

Investing in precious metals as a way of maintaining your wealth is a good idea. Metals are capable of holding their value much better than fiat money. However, many people are often skeptical about their limited use case, except for the ones used in industry. Yet, gold, silver, and platinum group metals (PMGs) keep proving their worth every day, among other metals and investment options. The key element of success in these types of investments is calculating your goals and having proper risk management in place. While this idea might gain increase your wealth and provide you with future security, it can really turn south when left unchecked.

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The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.