Some metals not usually found in nature are economically highly valued and are known as precious metals. Silver, palladium, platinum, and gold are the primary precious metals available, although they are more than that. Their scarcity and usefulness for industrial activity make them valuable. Also, their storage value is good due to them being a source of investment like gold trading. However, how do you invest in them? The answer to this question is provided in this guide, coupled with examples of precious metals worth investing in.
Notable Precious Metals Available in Nature
Precious metals are abundant in nature, but the notable ones include:
Like platinum, palladium is among the platinum-group metals and is also known for its industrial activity in chemistry, water treatment, electronics, dentistry, jewelry, and medicine. Unlike other precious metals, the investment value of palladium is low. Thus, investors rarely consider it as a store of value. However, its usefulness in the industrial sector is of great importance.
When mining platinum, other metals are found with it, such as osmium, ruthenium, palladium, iridium, and ruthenium, due to their properties. These metals are known as platinum-group metals, and platinum is one of them.
The main use of platinum is for industrial activity, which is prevalent in automobiles. The reduction in the emissions from the vehicle exhaust is because of catalytic converters, which are made from platinum. Other industries that use platinum include computers, refineries, and petroleum. Also, it is a store of value since it is also used in making jewelry because it is rare.
After gold, the second precious metal of enormous value is silver, which is commonly used for industrial activity. Industrial activity is the primary driving force for the usage of silver, as seen in equipment found in medicine, electronics, production facilities, and automobiles.
Since silver demand for industrial activity depends on the economy, there is a fluctuation in silver price and value, unlike gold trading. Therefore, the increase in industrial activity will cause a silver price surge. Also, valuables like coins, jewelry, bars, and silverware can be stored as silver since it is valuable. However, silver’s volatility is more than gold’s due to its ability to serve two roles and its small market size.
The most common metal with good investment value among the precious metal is gold. The uniqueness of gold is established by its being durable, a good conductor of heat and electricity, and its ability to shape. Gold is used mainly as a currency or in jewelry production. However, it is also used for some of the tools used by dentists and electricians.
Gold is the go-to metal of investors whenever there is a decline in the economy. You can carry out gold trading in many ways, including buying the physical form, shares of any gold mining industry, ETFs, and mutual funds focused on gold. Gold trading is suitable for long-term investors since the price is stable over a long time, even during an economic meltdown.
Steps on Investing in Precious Metals
The rarity of precious metals makes them worthy of investing in, and in doing that, choose either of the two options below:
- Investing in Physical Form: When precious metals are mined, they are available in physical form, which you can purchase and store till their value increases. They can be in the form of jewelry, coins, and bars.
- Investing in the products of precious metals: The second means is purchasing investment products of precious metals, such as precious metal mining industry shares, ETFs, and precious metals-based mutual funds.
Although the rarity of the precious metals makes them a good investment value, they have risks. Some factors can affect the price of these precious metals, such as the decrease in production, which will cause a reduction in the price of many precious metals. In this case, gold trading is preferable to other precious metals since it is less affected by industrial activity. Also, gold trading is the best option for investors who deal in long-term investments. However, its price stability compared to other precious metals is not the best investment opportunity for day traders.