There are different precious minerals that you can consider for investment. Since time immemorial, gold and silver have been the most desired valuable metals. However, other valuable metals can form a good portfolio to hedge against inflation. For instance, platinum, copper, and palladium are other commodities that you can add to your precious metals portfolio. If you are a beginner in precious metals, read on to learn how they work and how you can also invest in them.
Gold is by far the mother of all precious minerals since it is used to determine the value of different currencies. Gold is rare, durable, malleable, and it can conduct heat and electricity. Gold is used for jewelry, dentistry, electronics, and other industrial applications. The gold market operates 24/7, and the price is not affected by the demand or supply of the commodity. When the hoarders of gold decide to sell, the price drops, but it also increases when they decide to buy.
Gold is often desired by many traders because it acts as a safe store of value when money is perceived as unstable or there is political instability. Many people also stock gold to beat inflation since it maintains its value. Other elements like political crises drive people to buy gold. You can store gold in its physical state and trade it for things like shelter, food, medication, and other consumer needs.
During economic downturns, precious metals are often regarded as the safest form of investment. Silver is one of the popular options that you can consider. For instance, you can buy silver coins, rounds, or bars, and these assets are designed to protect the investors against market fluctuations. Silver bullion is viewed as the perfect choice due to its industrial demand. However, you need to get a silver buying guide to make an informed decision if you decide to invest in silver which is also referred to as the “poor man’s gold.” The demand for silver is growing since it is used for different purposes that include the following: solar energy, medicine, batteries, water purification, jewelry, and electronics.
If you are a beginner, silver bullion is a perfect entry point in the precious metal industry. Silver is easy to buy, sell, store, or even transport. Silver has been used for thousands of years as currency and often performs well during periods of economic crisis. The commodity also boasts of high liquidity and easy to use during a period of economic turmoil.
Just like gold and silver, platinum is traded as a commodity. Platinum is rarer than gold, and for this reason, it fetches a higher price. Platinum is viewed as an industrial metal and is mainly used in the automobile industry. The precious metal is also used in the production of catalysts that help to reduce harmful gases. The price of platinum tends to increase when the demand for automobiles is high.
Palladium is a lesser-known metal, but it has diverse industrial use in electronics and automobiles. Palladium is shiny, silvery metal, and malleable. However, it gets more durable than platinum if the right conditions are applied during processing. Palladium is also utilized in jewelry, chemical applications, groundwater treatment, medicine, dentistry, and it also helps reduce dangerous fumes from gasoline vehicles. Russia, Canada, The United States, and South Africa are the major producers of palladium. Therefore, political instability in these countries can impact the price of this precious metal.
Palladium plays a role in the creation of thin sheets that are in turn utilized in applications like fuel cells and solar panels. The metal acts as a great catalyst to speed up chemical reactions. Therefore, its largest industrial use is the production of catalytic converters. The metal is harder and more durable than platinum.
Most investors often overlook copper that also has a variety of uses. This precious metal can be used for industrial production, decorative elements, and other manufacturing processes. Of late, copper is increasingly gaining popularity as most investors are seeking ways to diversify their portfolios. This metal offers protection against issues like currency devaluation.
Precious metals provide an effective method of diversifying your investment portfolio. These valuable minerals offer protection against elements like inflation, political upheavals, and they also have no credit risk. However, you should know that every form of investment comes with some risk. For instance, the prices for precious metals can drop if there is more supply than demand. Therefore, if you want to achieve success from investing in these minerals, you should set clear goals and know the risk associated with the industry before making the final decision.