Precious metals like gold and silver are valuable and have been coveted for years together. Even today, experts would suggest everyone to include some precious metals to diversify the investors’ portfolio.
There are many ways to include precious metals in your portfolio, by buying gold bullion bars/coins, silver bars/coins, platinum bullion bars/coins, or palladium bars/coins. If this is the first time for you, read more to see how you can invest in them.
Let’s just start with one of the most popular and most commonly bought precious metals: Gold. People buy gold bullion because of its durability, ability to conduct electricity and heat, and malleability. This acts as a principal metal for jewellery, and we know how it was used as a currency too.
The several factors that are responsible for the increased demand for this yellow metal are:
When experts perceive banks and the economy to be unstable
or there is geopolitical instability, gold is accepted as a safe store of value.
When the stock market rates fall, people try and invest in other forms like gold bullion bars.
In a war-like situation, or during a political turmoil, people always look forward to buy gold bullion and try to convert and store all of their savings into gold bars or coins and use them as a currency when needed.
The price of silver, unlike gold, oscillates between its role as an industrial metal and as a store of value, which is why its prices are more volatile than that of gold.
Industry experts believe that the things that may have played a role in the fluctuation of silver prices are as follows:
Silver was once very prominent in the photography industry (the silver-based photographic film) which has been overshadowed by the advent of digital cameras.
Usage of silver in superconductor applications, microcircuit markets, batteries, medical products, electrical appliances, and so on.
Though it is unclear whether these developments have affected or will affect the demand for silver (non-investment), silver bullion bars have remained to be a popular choice as a store of value.
Platinum too, just like gold and silver, is traded on global markets, around the clock. It so happens often that these platinum bullion bars fetch a higher price than gold (during a stable situation), only because this is a rare metal.
Similar to the nature of silver, platinum is also used as an industrial metal, and its demand is the most when it comes to automotive catalysts, used to reduce the toxicity of emissions. The demand for platinum jewellery comes next. The computer and petroleum industries stand next in the demand queue.
One of the lesser-known precious metals for investments is palladium bullion bars, which are known more for their industrial uses. This is another silvery metal and is used in the electronic and industrial industries. This shiny metal is also used in jewellery, chemical applications, medicine, dentistry, and groundwater treatment.
In 1939, jewellers first introduced this metal in making ornaments. The alloy of palladium with gold makes the metal stronger than white gold. Pure palladium is malleable but attains more strength when made into sheets at room temperature. Those Palladium sheets are then used in applications like fuel cells and solar panels.
Palladium is 12.6% harder than platinum, making it more durable than the latter.
Are precious metals a good investment?
Precious metals have high intrinsic value (Intrinsic value is a measure of the worth of an asset). These metals bear no credit risk and offer insurance for any economic or geopolitical turmoil. From the experts’ point of view, precious metals also provide a low to negative correlation to other assets like bonds and stocks, reducing risk and volatility.
So just like one take risks in career, passion or adventure sports, precious metals are a great option to start your investments. Now that we have given you a brief of what type of precious metals you can invest in, it is also our responsibility to guide you to a marketplace. We would suggest every beginner to visit Central Bullion for genuine metals, safest transactions and a great experience overall.