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A macro shot showcasing a gold ingot placed on top of a troy ounce silver and palladium bar

 

Precious metals offer investors tangible assets with thousands of years of history as stores of value and economic insurance. Gold, silver, platinum, and palladium are scarce metals that cannot have their supply artificially inflated like fiat currencies. 

This overview discusses the top four precious metals worth owning and explains multiple ways to gain portfolio exposure. By the end, readers will understand why these metals deserve consideration for preserving and growing wealth now and for years.

 

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1. Gold – The Most Precious Metal of All Time

Gold has been coveted and valued since ancient times. Egyptians and Sumerians prized the sunny metal for its beauty, malleability, and resistance to corrosion. Humans instinctively recognized gold as a rare tangible asset. Societies used it as jewellery, decorative objects, and currency.

Gold occupies a unique role in the global economy today. The famous “gold standard” made it the basis for currency valuations until the 1970s. Central banks continue to hold massive gold reserves. The U.S. Federal Reserve keeps the world’s largest stockpile, with over 8,000 metric tons stored in fortified vaults.

Unlike paper money, gold cannot have its supply increased at will. Annual worldwide gold production is only around 3,200 metric tons. Gold’s scarcity and high-value density make it the money of choice when paper currencies falter. 

Physical gold owned outright provides the ultimate insurance when governments create inflation or enact repressive policies that rob citizens of financial freedom.

In addition to its role as money, there is a constant demand for gold jewellery and industrial applications. Its electrical conductivity, malleability, and corrosion resistance make it vital for electronics, dentistry, aerospace, and other fields. 

While the price of gold fluctuates, its intrinsic value means it will always be accepted and desired worldwide.

Give this article a read: Are Gold Bars A Good Investment For Retirement?

 

2. Silver – Timeless Luster in Every Ounce

 

Close view revealing the fine details of silver bullion bars along with their respective labels

 

Silver has much in common with gold. It has served as money for millennia, is widely valued as a metal for jewellery and decorative objects, and has vital industrial uses. But silver differs from gold in many ways:

More Abundant – Unlike rare metals like gold, silver is mined in large quantities globally. The annual supply is around 30,000 metric tons.

More Affordable – Silver costs much less per ounce than gold, making it more accessible. Investors can own more total ounces.

Higher Volatility – With greater supply and lower prices, the value of silver fluctuates more than gold. The gold/silver ratio quantifies this volatility.

Like gold, silver has anti-bacterial properties. Its use dates back to ancient Greece and Rome. Silver conducts heat and electricity at the highest rate of all metals. Industrial applications include solar panels, circuit boards, electrical switches, and medical devices. 

Silver is essential for RFID chips, automobile electronics, and wireless devices. These critical applications ensure silver will remain in demand.

Silver also tends to track the price of gold, although magnified in both directions. When gold rises 10%, silver often rises 15%. But when gold falls 5%, silver may drop 8%. This volatility makes silver attractive when gold prices are trending up. Astute precious metals investors hold both metals to benefit from silver’s upside price potential while gold anchors their portfolio with stability.

Read this article for more insights: Silver Prices - An Investor’s Guide

 

3. Platinum – Pinnacle of Elegance and Rarity

 

Stacked composition with a foundation of platinum bars and a single ten oz bar on top

 

Platinum is among the rarest and most coveted metals on earth. It is 30 times more scarce than gold. All the platinum ever mined could fit in a small room. 

This metal is extremely durable and malleable, making it ideal for jewellery and decorative objects. It also has unique catalytic properties that facilitate essential chemical reactions.

Here’s what makes this silvery-white metal special:

  • Rarity – Platinum mining is limited, with an annual supply of around 190 tons. Deposits are in South Africa and Russia. This scarcity drives its value.
  • Catalytic Demand – Most platinum demand comes from automobile catalytic converters, petroleum refining, and chemical production.
  • Jewelry Popularity – Platinum’s pure white lustre, strength, and rarity make it desired for rings, watches, chains, and other adornments.
  • Prestige – Platinum coins, bars, and jewellery command premium prices that exceed gold. One ounce trades equivalent to 1.5 ounces of gold or more.
  • Wealth Density – With platinum prices at a premium to gold, storage, and transport are more efficient per dollar invested.

Platinum belongs in any precious metals portfolio. It provides diversification along with gold and silver. It also carries no counterparty risk, and platinum bullion is readily bought and sold worldwide.

Consider giving this a look: Platinum Price Slide Continues In 2024 

 

4. Palladium – Radiant Grace in Noble Form

Palladium is a precious metal that deserves more investor attention. It is a lustrous rare metal in the platinum group. Like platinum, palladium facilitates catalytic chemical conversions, but it has some key differences:

  • Whiter Appearance – Palladium has a brilliant silver-white metallic shine. Platinum is slightly greyer.
  • Lower Density – At half the density of platinum, palladium weighs much less per unit of volume.
  • Volatile Pricing – Concerns over tight supply from Russia and South Africa cause large palladium price swings. Prices soared to historic highs of over $2,800 per ounce in 2020.

Palladium has uses beyond catalytic converters, including electronics, dentistry, medicine, hydrogen purification, jewellery, and more. Like platinum, palladium is extremely rare. It also serves as a store of tangible value and inflation hedge.

However, intermittent supply shortages and heavy demand from the auto industry make palladium more volatile than gold, silver, and platinum. 

Take a look at this article: 6 Most Traded Commodities You Absolutely Need to Know

 

Precious Metals to an Investment Portfolio

Investors have many options to gain portfolio exposure to physical precious metals. Bullion products from reputable mints and dealers give the benefits of tangible ownership. 

They also trade at the lowest premiums over fluctuating spot metal prices. Popular bullion coins like Gold Eagles, Silver Eagles, and Platinum Eagles are easy to buy and sell worldwide.

Stacking fractional gold, silver, and platinum bars is a cost-effective way to accumulate positions. Bars from trustworthy foundries like PAMP Suisse carry modest premiums. 

High-worth investors can buy 400-ounce gold “Good Delivery” bars, kilo platinum plates, and 100-ounce silver ingots. Precious metals IRAs allow investing in coins and bars without tax penalties.

In addition to physical metal, investors can also purchase:

  1. Precious Metals ETFs: Exchange-traded funds like GLD and SLV track gold and silver prices.
  2. Mining Stocks: Shares of companies that mine precious metals offer leveraged exposure to price gains.
  3. Rare Coins: Scarce vintage gold and silver coins have a collectable value exceeding the metal content.
  4. Precious Metals Streaming Companies: These firms finance mines in exchange for discounted future production.

 

Bottomline

Precious metals like gold, silver, platinum, and palladium offer traders and investors a way to diversify portfolios. Their physical properties and scarcity provide an anchor of tangible value to hedge against currency devaluation and inflation. 

While subject to price volatility, they have stood the test of time as stores of wealth. Traders looking to preserve and grow capital should continue learning about trading precious metals. 

With more profound knowledge, traders can make informed decisions and strategically allocate percentages of their portfolios to harness the enduring power of precious metals.

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“When considering “CFDs” for trading and price predictions, remember that trading CFDs involves a significant risk and could result in capital loss. Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be considered investment advice.” 

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