Throughout human history, precious metals have had a certain appeal to the human eye. Whether it’s gold, silver, platinum or palladium, their shine and luster has led them to become indicators of value. As a result, they have been used as coins and bartering chips throughout history. Each has its own qualities, so depending on exactly what you’re looking for you can make an informed decision on your precious metals investing.
Investing in Gold
Gold has always been the most popular of the precious metals in terms of investing, and for quite some time it was the basis for maintaining the value of currency on the gold standard. Almost all countries are off of the gold standard now, but even in the age of fiat currency, it is considered to be a reliable holder of value.
Gold made rapid rises from 2005 through 2010, going from $513 per ounce to more than $1,400 per ounce. People tend to invest in gold in order to protect themselves from the risks of inflation, currency devaluation and economic distress. Unfortunately, those are all heavy risks at the moment, so people have invested heavily in gold.
While some believe that gold is currently overvalued, there are plenty of reasons to believe that precious metals investing will remain popular in the not too distant future. As such, expect gold to continue to grow in value.
Investing in Silver
In some ways, silver is like the little brother of gold. It tends to make similar movements in price, sometimes lagging a little bit behind gold. In other words, if gold goes up in value, expect silver to do the same, just a bit later. Silver can be bought at a lower price per ounce, so it is a more accessible investment for those who want physical possession of bullion.
Silver has become increasingly popular in exchange traded funds as well, which are generally physically backed funds. That means that they take ownership of silver, and sell shares through a stock-like fund, which can be traded on the markets. This makes investing in silver, or other precious metals investing, a lot easier for the average investor. While it can be impossible for many to afford bullion or large quantities of physical gold or silver, almost anyone can afford shares of a lower priced exchange traded fund.
Silver is also used industrially, especially as circuitry in electronics. Since those figure to continue to be manufactured at high rates moving forward, there’s little reason to believe silver will be in less demand in the future.
Investing in Platinum and Palladium
Platinum and palladium are the more industrial of the precious metals. They share a lot of properties and are commonly used in catalytic converters. These are car parts that are responsible for the reduction of emissions, which means that they will continue to be used on all vehicles with gasoline powered engines in order to meet strict economic regulations. However, if electric cars become more widespread in their use, there could be a decrease in the demand for platinum and palladium.
Platinum tends to be a lot scarcer than gold and silver, so it usually trades at a higher cost per ounce. That’s not always the case, but it has held up historically. Platinum tends to see less investing as a result of economic trends, so it is primarily priced based on supply and demand. The same is true of palladium, though it is a lot cheaper than platinum. One key to watch for pricing of platinum and palladium is the continuity with which they are mined, as they sometimes come from unstable regions that have work stoppages.