Precious metals are a special group of alloyed metal which are considered to be rare, and as a result have a high economic value in financial markets. The rarer these metals may be, the higher their value. You are probably aware that these metals are often used in industrial processes – but did you also know that they are also good for financial investment purposes?
To many investors, rare and desirable metals such as gold, platinum and silver are purchased by investors for the purpose of appreciation and/or trade. Other metals used for investment purposes include iridium,(used in specialty alloys) and palladium, (typically applied in electronics and chemical products).
Investors can leverage the value of certain metals by purchasing the physical asset (often in the form of bars or coins), purchasing futures contracts for a particular alloy, or by purchasing shares sold by publicly traded companies. There are many companies dedicated to the production and exchange of these types of metals. Funds backed by bullion are part of the strategies sometimes included in mutual funds and exchange-traded funds (ETFs) as part of a diversified portfolio.
Gold, silver, and platinum are sought after investments, not only due to their diversity but also because of their stability. Due to their composition, popularity, and rarity, metals like silver, gold, and platinum have intrinsic value, which can be incredibly useful in volatile financial situations or in times of inflation. Possibly due to its fame, gold is the most popular precious metal for investment purposes. However, silver is also becoming more and more popular, as its price has risen over the last decade.
When purchased for investment purposes, these metals are referred to as bullion. Gold and silver are measured differently than most substances we are used to. The standard gold bar has a weight of 400 troy ounces, which is equal to several hundred thousand grams. Thus it important to keep this in mind when talking about these products.
If you’re considering investing in rare metals, you may be on to something. But you’ll want to talk to your investment professional in order to make and informed decision.