If you are new to investing in physical metals, read this article for some expert advice. Conventionally speaking, precious metals have largely comprised 4 physically rare metals, namely: Gold, Silver, Platinum, and Palladium. However, due to the high utility of some alloys such as Bronze, metals such as Zinc, Aluminium, and Copper too have arisen in demand.
Why do people invest in physical metals? There are several reasons why do they so.
1. Hedging against risk
Most bullion investors are in these investments because they want to offset any unanticipated business risk. They perceive gold, silver, platinum, etc as precious currencies, which will support them in times of extreme turbulence. In countries like Australia, there is a very small chance that things will become adverse. However, it is always in your best financial interest to keep your portfolio diversified by investing in physical metals. Perhaps why investors still buy gold and silver from savvy merchants such as Auctus Minerals.
2. Practical uses
Physical metals like gold, silver, and platinum are used in several scientific and technical applications. Zinc is considered to be a strategic material and is used in many defence applications. Many investors like buying these metals precisely for these reasons- a stable and high demand for these metals from the scientific community.
At times, you may fall on the rock bottom and hit ground zero. You may lose your job, and there may be no alternative sources of income. In situations like these, gold and silver ornaments and jewellery provide that much-needed buffer. You could say that these precious physical metals are like insurance in our turbulent lives.
There are some investors who invest in these metals for commemorating certain events like marriage, birthdays, etc. In Australia, nearly 25% of all gold and silver products are bought and sold on important occasions.
Now that you know why people buy precious metals, let’s find out a bit more about some of these metals.
People have been buying and selling gold for thousands of years now. Gold coins, beads, and ornaments have been discovered in several ancient sites by archaeologists. The most important reason why people buy gold is that it provides insurance against bad times. Also, it acts as a cushion against high inflation. When the prices of food and other objects become prohibitively high, people use gold reserves to take care of those ridiculously high prices. Even governments use their gold reserves to secure loans from international bodies. So, if you are considering investing in precious metals, start with gold.
There is an excellent substitute for gold in silver. This metal is relatively inexpensive and is used in several industries. These days, silver is used as an essential component in the solar panel industry. This means that the price of silver will continue to be driven by its demand in energy production, among other industries. Even though silver is inexpensive compared to gold and platinum, you would need a large space to store silver; so your storage costs go up.
Platinum is used quite extensively in catalytic converters, and therefore, is quite a valuable material in environment-related industries. Even though the price of this metal is higher than gold, the latter is more valuable. However, one reason why you should consider buying this metal is its price stability. Unlike gold, the price of platinum doesn’t fluctuate wildly.
You can consider buying this metal to diversify your metal portfolio. Palladium is used in the automobile industry and mirrors platinum in price movements. However, these metal trails gold and silver in value.
Most investors avoid copper but there is no reason why you should avoid it too. Copper is used in many manufacturing industries and is a strategic metal. There are very few countries that produce copper and this makes this metal valuable to several investors.
We hope this article has served its purpose as a handy guide on physical metals.