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Precious metals are rare, naturally occurring, metallic assets that have high economic value. In general, they are less reactive than most elements, and tend to be ductile and have a high luster.
In the past, the precious metals market was important because the metals were used as currency. Today they are considered valuable ways to invest 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 we’ve provided 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 diversify a 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 through industrial applications. In other words, the metal is not only bought by investors, but manufacturers are also buying it as they are looking to use it for different applications.
Silver trading is intriguing, because those applications are incredibly varied — silver is used in devices like batteries and catalysts, but it’s also used in medicine 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.
Best precious metal to invest in: Palladium and platinum?
However, what they’re perhaps best known for is their use in the automotive industry. Both are used in catalytic converters, with palladium being used in catalytic converters for gasoline engines, and platinum being used in catalytic converters 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. Prices for gold, silver, platinum and palladium are currently much lower than they have been in the past, and many market watchers believe that today’s sliding prices present a low-risk buying opportunity.
And luckily, those interested in the metals have myriad 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.