A Beginner’s Guide to Buying Precious Metals

Given the uncertainty of the global economy, it is more than ever paramount to either start investing or diversify an existing investment portfolio. Adding to it the security of tangible precious metals such as gold, silver, platinum, and palladium which are highly sought-after investment options could be a possibility. As the pandemic has caused unprecedented economic devastation, gold, the most traded of all precious metals and a safe-haven asset, is holding its value even while the demand for jewelry is plummeting. Although commodities are generally highly volatile under certain circumstances such as political turmoil, inclement weather, and natural disasters, this precious metal remains one of the most stable commodity investments. Notable shifts in supply and demand tend to be short-term.

Discovering and developing a gold source is difficult and thus makes the pricey and lengthy mining activity slow to react to price fluctuations.

Silver, like gold, is considered a safe-haven investment because it stores value and is a hard asset. Furthermore, silver lends itself to the investment world and the industrial sector where it is used in solar panels, medical equipment as well as electrical switches and countless other applications. The economy and the industrial sector have a strong effect on silver production and value.

Platinum and palladium have multiple industrial applications and in the jewelry sector. Platinum is viewed as more precious because of its rarity and scarcity; palladium is more durable and when mixed with gold, it creates a stronger alloy.

Coins, bars, ETFs short for Exchange Traded Funds and mutual funds that include mining stocks are all different ways to invest in silver, platinum and gold. Bars and coins are the traditional way to store them while ETFs and stocks offer investors an alternate. Buying online through reputable dealers who are preferably members of metals industry groups such as the Industry Council for Tangible Assets or Professional Numismatists Guild is the best choice. The London Silver Fix provides baseline silver prices. The price is updated twice a day and is carried by websites such as Golden State Mint or Upstate Coins. By subtracting the price of the London Silver Fix from the dealer price, one can find transparent pricing.

Investing always carries an inherent risk factor. Unpredictable market factors cause price fluctuation and when the market condition is good, the price of metals tends to fall and when it’s not, prices tend to rise. Supply scarcity may also cause prices to rise, demand to dampen and buyers to hold back. Precious metals are highly liquid and their returns are less impacted by investors’ sentiments. There is also historical evidence that they withstand adverse market conditions better than other options and investing in them diversify risk and ensure steady returns.