In the world of trade, crude oil and precious metals dominate the market. While trading barrels of oil is not possible for everyone, trading precious metals are relatively easier.
In the past couple of years, there has been a consistent growth in the value of precious metals.
Only gold comes to mind when people hear about precious metals, but there is more to investing in precious metals than gold. However, gold is the primary choice among investors.
While the demand for gold fell by fourteen percent in 2020 compared to 2019, the average gold prices have soared by twenty-five percent.
Due to the steady growth of gold, many investors are also considering investing more heavily in other precious metals besides gold as they follow similar market trends.
Gold is one of the oldest stores of value in the world. It acts as a safe haven for investors as other assets do not impact the gold market.
People invest their money in gold to hedge against inflation and because of the metal’s usability. Even in unstable economies, gold prices remain relatively stable when compared to other investment assets.
Silver is often presumed to be inferior to gold, even though its growth is almost parallel.
However, in the past year, the growth of silver has surpassed gold’s growth rate. Investing in silver is a reliable option when the economy is flourishing, and the demand for metals is high.
Silver is also used in electrical appliances to make the electrical circuits, making the commodity’s demand and supply volatile and dependent on these industries.
Platinum is an underrated precious metal that most investors often ignore as it is more scarce than any other precious metal.
Platinum also trades at a much higher price than gold, which acts as a barrier to investing in platinum.
The precious metal is also used to make hypoallergenic jewelry as platinum does not react with the skin, unlike gold or silver.
Palladium is more commonly used in various industries and can be found in a variety of electronics.
The applications of palladium extend to dentistry, jewelry, and groundwater treatment. Investors tend not to invest in palladium as it is heavily used in different industries, making its demand volatile.
Reasons to Invest in Precious Metals
- The metals are economical to purchase and easily accessible as you can buy them from abundant traders and dealers. Investing in precious metals is convenient because of their economical pricing.
- Gold and silver are indispensable precious metals. They are used practically everywhere, from jewelry to circuit boards and even in some kinds of solar panels. Their practical applications ensure that these metals will never lose their value.
- The metals have gone through the test of time and turbulent economies but are still standing strong as the global demand for precious metals is showing an upward trend.
- Investors have the option to buy precious metals in variable quantities as per their choice and budget allocation. This makes it easier for budding investors to get their foot in the door.
The global market for precious metals rides on many factors which one must understand before investing. So, make sure to catch up on the required information before you make a decision to invest.