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Investing in Precious Metals – Gold, Silver, or Platinum?

Investing in Precious Metals – Gold, Silver, or Platinum?

Many people have been advised to hold precious metals in their investment portfolios as a hedge against a poor economy. There are more ways than ever to include gold, silver, or platinum in your portfolio. However, choosing which metals and how to invest can be a challenge. Here are some benefits and drawbacks to each.

 

Gold

Gold Key, weighing one kilogram is used to access a ten digit account number which is known only to the bearer of the Gold Key. (Photo credit: Wikipedia)

 

Gold is the most common precious metal investment. Gold coins are a common form of gold investment, as are gold bars, and gold certificates. Gold has increasing demand in Asian countries as a gift for the New Year, birthdays, and romance. In addition, a large number of dealers make the market very fluid. However, gold prices can be highly volatile. Gold prices can change as much as 15% in a year without causing any alarm. Gold stocks experience even more volatility than the actual metal.

 

Holding actual gold, like all precious items, invites the risk of theft and loss through disaster. In addition, gold can be expensive to have assayed for value. While gold certificates remove these risks, they have increased costs, such as management and storage fees and commissions.

 

Silver

5 kg Silver bar
5 kg Silver bar (Photo credit: Wikipedia)

 

Silver is often pointed to as a more valuable investment than other metals due to the high demand in industrial industries. Silver is not tied to any currency, so the value does not fluctuate based on currency markets. Silver is more accessible to average investors due to its lower price-per-ounce than gold or platinum. However, the industrial uses can cause demand to rise and fall unpredictably, strongly affecting the price of your investment. In addition, since silver is tied so closely to industry, it doesn’t provide as “clean” of a hedge against a down economy. However, it also won’t suffer as much as gold in an up economy.

 

There are a variety of silver coins, bars, and accounts that allow an investor access to the silver market. 1oz. silver bars have serial numbers that protect you from theft and counterfeit. 1oz. silver eagle coins are easily recognized by dealers and are a very liquid investment. Silver investment funds don’t let you have actual possession of silver, but you aren’t open to theft or counterfeit, either. You do need to trust the company issuing the investments, though, to avoid company bankruptcy or investment manipulation.

 

Platinum

native Platinum nugget, locality Kondyor mine,...
native Platinum nugget, locality Kondyor mine, Khabarovsk Krai, Russia. Size ca. 35 × 23 × 14 mm, weight ca. 112g = 3.6 oz. Collection: M.R. (Photo credit: Wikipedia)

 

Platinum has many ornamental uses as well as industrial applications, supporting a strong price. It tends to hold a higher price point than silver or gold, and the market is less volatile. It can be harder to find platinum dealers, however, as the metal is quite rare and not as popular as silver or gold for investing.

 

Like other precious metals, you can buy coins, bars, or trading certificates. Platinum itself is a much rarer metal than silver or gold, which makes it both desirable and expensive. If you choose to own the actual metal, you will want good security or a safe deposit box for storage.

 

Owning precious metals is a great way to protect your investments from the times the economy drops off.  With appropriate research, gold, silver, or platinum will help you maintain your financial stability and growth for many years to come.

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