Your Guide to Investing in Precious Metals

Since ancient times, silver and gold have fallen under the category of valuables, and the story is the same even today. Savvy investors always have a portion of their portfolios dedicated to precious metals. But which precious metal could you use for your investment? And what is it about their volatility? If you are a beginner in the investment of gold, silver and platinum, you will want to read to know more about these precious metals.

Gold

The first one is the oldest of them all – gold. Some features that make this metal stand out from the rest include good conduction of both heat and electricity, durability since it does not corrode, and its malleability. Besides its common use in jewelry and as a form of currency, gold is also used in electronics and dentistry. Unlike most commodities, the price of gold is not affected by the forces of demand and supply. It is mainly based on the attitudes of the hoarders.

Some of the factors that can lead to increased hoarding of the precious yellow metal include the following:

• Systemic financial concerns – Gold is always sought as a safe storage of value should banks and money become unstable.
• Political crises and war – Gold hoarding has always been on the rise in the instance of political upheavals and war, probably because of better storage and portability.
• Inflation – Most investors buy gold from Durham Precious Metals should the real rate of return on other investment go negative.

Silver

Unlike what happens with the price of gold, that of silver is very volatile since the metal is used not only as a store of value but also has some applications in the industry. As such, the demand and supply pull, affect the price of silver directly.

These factors include the trends brought about by the innovations such as the replacement of silver photography with the digital camera, use of the precious metal in medical products and electrical appliances among other industrial products, as well as its use in the batteries and micro circuits. So the factory applications have a direct influence on the price of silver.

Platinum

Included in the list of valuable metals is platinum. Its trading is done around the clock in the global markets and it can fetch even higher prices than gold during times of political instability and because it is rarer than the other two. The price of platinum is influenced by, among other things, the demand and supply due to its industrial application and auto sales and their production numbers.

Also, since the mines are mainly only in Russia and South Africa, the volatility of the precious metal becomes even higher. Matter of fact, it is the highest of the three.

Conclusion

While precious metals are good items to include in your portfolio for diversification, you will be safer if you understood among other things their volatility and had your goals defined. You could use the volatility to harness wealth, but on the other hand, you may end up on the rocks if you don’t make the right decisions at the right time.