Precious metals are rare, naturally occurring, metallic assets that have high economic value.
In the past, the precious metals market was important because the metals were used as currency. Today, these metals are considered valuable because of their investment and industrial uses.
But what is the best precious metal to invest in? Different investors have different needs, and it’s important to be aware of the factors that affect supply, demand and prices for each precious metal before making a financial decision.
Below is a quick overview of the gold, silver, platinum and palladium markets. Those four metals are the most popular of the precious metals, and all can be good investment choices. Read on to find out the ways to invest and everything you need to know before you buy precious metals.
Best precious metal to invest in: Gold and silver?
The best-known precious metals are gold and silver, and it’s not hard to see why they are good assets to add to an investment portfolio. Gold is a key material for jewelry, and is also used as a store of wealth by investors around the world. Indeed, many believe that it’s superior to any and all paper currencies.
Silver is also used as a store of wealth and in jewelry, but unlike gold bullion, it’s also subject to a fair amount of demand from industrial applications. In other words, the metal is not only bought by investors, but also by manufacturers that then put it to use in various ways.
Silver trading is intriguing because those applications are incredibly varied — the white metal is used in batteries, electronic devices and as a catalyst to produce industrial chemicals, but it’s also found in medical devices and in the automotive industry.
Gold and silver prices are most heavily affected by global economic and political changes. Both metals are considered safe haven investments, and tend to receive increased attention from investors in times of turmoil. If you believe that more tumultuous times are in store, you may want to consider owning gold and silver bullion as a hedge against these troubles.
Best precious metal to invest in: Palladium and platinum?
Sister metals palladium and platinum are also well-known precious metals. Like silver and gold, both metals are used in jewelry and are bought by investors for portfolio diversification.
However, what they’re perhaps best known for is their use in the automotive industry, specifically in catalytic converters: palladium for gasoline engines, and platinum for diesel engines.
While platinum and palladium prices sometimes also move because of worldwide economic and political volatility, they are influenced more strongly by supply and demand dynamics. In recent years, higher demand and strikes at key mines have pushed the markets for both platinum and palladium into deficit.
Investors who chart these changes and think those circumstances will eventually result in higher platinum and palladium prices may want to consider owning these metals to make a profit.
Best precious metal to invest in: Investor takeaway
For investors looking to flex some purchasing power in the precious metals space, there’s perhaps no time like the present. Luckily, those interested in gold, silver, platinum or palladium have a myriad of options in terms of how to buy into the precious metals space.
From investing in stocks and mutual funds, to purchasing an exchange-traded fund to physically buying precious metal coins, there are a plethora of ways to get involved in the space. All it takes is some research to determine which is the best fit.
As a final note, it’s worth being aware that while gold, silver, platinum and palladium are undeniably the most high-profile precious metals, other precious metals do exist. Rhodium and rhenium are two fairly common ones, with rarer examples being germanium and beryllium.
This is an updated version of an article originally published by the Investing News Network in 2017.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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