This is a great beginner’s guide for those interested in investing in precious metals. Discover the advantages of investing and how best to get started. So, you are ready to begin investing in the wonderful world of precious metals.
Congratulations, and welcome! This guide will walk you through how to get started.
First things first – buying physical bullion is way different than trading paper or digital contracts on an exchange.
For that reason, please ignore any advice about trading/speculation from other sources. There is a risk of scams out there which could try to convince you otherwise.
If it sounds too good to be true, it probably is.
Don’t fall for “get rich quick” schemes promising unrealistic returns. You won’t get rich quick by following this advice, but if done right over time you can get richer much faster compared to not doing anything at all.
Before you start investing in anything, it’s important to think about the purpose of your investment.
Having a clear reason as to why you are purchasing gold can help keep yourself on track and focused towards reaching your goal.
There is nothing wrong with having multiple reasons for buying precious metals, but hedging all of your retirement eggs into one portfolio basket should be avoided.
Learn about Gold IRAs and Retirement plans. (it makes sense to diversify because no one knows what the future holds).
For example, you may want some physical assets like precious metals as currency if/when currency debasement becomes a worldwide phenomenon.
Or maybe you would want it so that you have something to barter with if civilization collapses.
Maybe there will be a currency crisis where liquidity dries up and people flock to tangible assets, and you want to have some of your wealth in physical form just in case.
Maybe you fear hyperinflation more than a collapse, but fear more than the status-quo. All of these are good reasons for investing in gold or silver.
In any case, this guide will assume that your goal is to make a profit by accumulating more gold/silver over time.
Gold
Gold is the king of all metals.
It’s not only beautiful and scarce, but it has practical uses too. One example would be in dentistry where gold can replace dental amalgam fillings that are more likely to crumble with time.
Gold also shows up on some electronics-related products, because its malleability makes for perfect conductive wires or contacts.
But beyond these industrial jobs, there are endless possibilities and uses for this precious metal.
It is by far the most commonly accepted currency around the world for many centuries. Learn more about why people invest in Gold.
5 Reasons Why Investing in Gold is a Smart Idea
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Silver
Silver has always been a popular metal to invest in, and it was no different during the 18th century.
As an industrial material, its prices are closely tied with supply and demand trends.
Silver’s prices may see fluctuations based on whether or not people perceive silver as something they can store for future use like gold.
Silver is the counterpart to gold.
Unlike its more stable cousin, silver can be volatile and swings between roles as both a store of value and industrial metal.
However, silver is still a highly sought-after metal with many desirable properties.
Platinum
Reuters released a report where they mentioned platinum’s return as an industrial metal.
According to Reuters, platinum has recently been used more frequently in industrial processes rather than being seen exclusively as one of the precious metals.
This means platinum is being used to make items which are non-luxury in nature, such as electronics and automotive parts.
Platinum can be used in many different ways, including catalytic converters for automobiles, chemicals which are necessary for computers and other electronic items.
Platinum is also used in respiratory equipment such as nebulizers.
Palladium
Palladium is a silvery-white metal that is similar to platinum.
Palladium has more industrial use than platinum. It is widely used in many types of manufacturing processes and can be used for: medical applications, dentistry, chemical applications, and jewelry.
Palladium has been used broadly in electronic equipment, and is often alloyed with platinum or nickel to produce strong, wear-resistant and non-corroding materials.
The palladium/silver/cadmium alloys are among the more common palladium alloys used for dental alloys because palladium provides antimicrobial properties.
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The Bottom Line
Precious metals are most often used as a store of value, it’s important to have precious metals in your portfolio because they are considered the only true currency that is not controlled by any one nation.
They are also useful for hedging inflation risk.
Prices fluctuate based on market forces, especially supply and demand. Similar to other commodities, the value of precious metals can be affected by other factors such as weather conditions, war and political upheaval.
Metals are also held for investment purposes, which tends to increase their value when fewer are available.
Gold is typically considered a safe haven commodity that is less volatile than stocks or bonds in weak economic conditions.
Silver is more likely to be considered a speculative investment because it has a lower price point per ounce compared to gold, making silver prices susceptible to large swings.
Different kinds of precious metals are often used together as part of an asset diversification strategy. For example, someone with a long-term focus on increasing their wealth may choose to hold about a third of their assets in a safe haven, such as gold.
That same person may choose to use another third of their assets to take advantage of potential opportunities for returns from other markets or investments, such as stocks.
The remaining assets are typically held in cash and short-term investments.
Gold is also considered a valuable asset by many international governments and central banks.
The World Gold Council estimates that about 16% of all gold ever mined in the world is held by central banks around the world, worth more than $1 trillion at today’s prices.