The Art of Precious Metals Investing

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Precious metals are often used as an effective source of investing. Precious metals are frequently used as a hedge against inflation, deflation, or currency devaluation. The recent financial crisis has created a solid market for alternative investments that include precious metals. Massive government deficits have caused some currencies to decline in value. The returns on equities, bonds, and real estate have not been adequate over the past several years in many world countries. This lack of return on standard investments has created a significant risk for these basic investment instruments.

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The alternative investment market including precious metals commodities has provided a solid investment alternative. The effective and current investment strategies of Precious Metals Investing include investing for future outlooks with precious metals. For example, interest rates are generally accepted to be related to the price of gold. An increase in interest rates over several international economies will drive the price of gold higher. The banking industry tends to be closely related to the precious metals commodities market as well. An increase in banking interest rates will cause the price of international gold to rise. Precious metals pricing can be affected by short selling precious metals commodities. Both the financial reserve banks and national bullion markets can significantly affect the prices of various precious metals on the open international markets.

Economic hardships often create a demand for alternative investments. Investors who usually place their investing funds in equities or bonds may think again about this type of financial instrument. Corporate stocks and municipal bonds have been standard investment avenues for those individuals and hedge funds that want to gain a good interest return. The economic crises that have occurred internationally over the last several years have created a downturn in standard equity and bond investments. The real estate markets both nationally within the U.S. and internationally is not as they once were. There have been no significant real estate markets in the U.S. that have given a good return on the investment placed in these markets. The housing bubble of the past has become an upside down issue for many real estate holders. The prices of residential properties across the U.S. are at all time lows. Investing in standard markets seems to be at a stand still. Alternative financial markets are being used for continual economic gains.

The precious metals investment market is an alternative economic market that seems to be giving a predictable economic return on investment. There are several alternative precious metals markets that are viable in today’s international financial markets, and these selected precious metals are the following:

1. Precious metals are rare and natural metallic and chemical elements that have a high current economic value. These precious metals are said to be less reactive and usually have a high luster. Precious metals have been used in the past as currency. These metallic elements are regarded today as investment products and industrial commodities. Industrial uses may include jewelry, dental products, and other commercial uses. Precious metals may include gold, silver, platinum, and palladium. Lesser known precious metals include ruthenium, rhodium, osmium, and iridium.

There is a demand for precious metals because these elements can be used in commercial businesses. They can be stored easily, and these elements keep their market value easily. Precious metals have unique and valued uses among the jewelry industry and with certain professional groups as well. These natural elements are rare and valuable. They are bought at a much higher price that the common industrial metals.

A metal is said to be precious if it is rare. Recent discoveries of ore deposits have increased the supply of some precious metals. There are improved mining techniques that are available. These metals tend to be in high demand and have a sustainable market value. Bulk amounts of precious metals are said to be in bullion. These amounts of bullion precious metals are traded on various commodities stock exchanges. Bullion trading is valued by mass and purity and usually is not valued for its monetary face value.

2. The rare precious metals include platinum and palladium. Platinum is a chemical element. This element is one of the rarest elements in the Earth’s crust and has a limited abundance. The metal is the least reactive. It can be found in some nickel and copper ores. There are some native deposits of this element in South Africa, and 80% of the world’s production of this natural element occurs in this country.

Platinum exhibits an unusual resistance to corrosion, and this resistance occurs at high temperatures as well. This precious metal occurs naturally in the various riverbeds in South Africa. It has been used as an element for modern day jewelry and other commercial uses.

3. Palladium is a precious metal that tends to be rare and maintains a high resell value. It has been selected as a good investment metal. It is a chemical that is rare, and is a member of the platinum group metals (along with platinum, rhodium, ruthenium, iridium, and osmium). These precious metals are similar in composition. Palladium has the lowest melting point and is the least dense of this group of precious metals.

Palladium is normally used for catalytic converters, and over half of the supply of this precious metal goes into this particular use. Catalytic converters are used in automobiles to convert the harmful gases into a harmless vapor. Palladium is used in dentistry, electronic equipment, medical applications, hydrogen purification, chemical uses, ground water treatment facilities, and jewelry. Fuel cells use palladium to combine hydrogen and oxygen to produce electricity, heat, and water.

Alternative investing has frequently found that gold is a solid hedge or safe guard against economic turmoil. Gold can be bought as a precious metal investment. This precious metal is often purchased as an alternative investment during currency failure, burgeoning national and international debt issues, war, and social unrest. Speculators use this precious metal to hedge against these types of monetary problems. Futures contracts are bought and sold in the commodities markets as alternative ways to gain a solid return on investment. This precious metal has been used as a gold reserve element for some of the world’s currency systems. Gold tends to not have a significant correlation with other commodities prices as well. Gold behaved more like a currency during the past global financial crisis from 2007 to 2012.

Central banks and international monetary funds tend to influence the price of gold. This precious metal is used as a standard gold reserve for many central banks and financial institutions. The price of gold tends to be determined by demand and its value among the banking industry as a reserve element. Gold price and value tend to not be directly correlated with the supply of gold.

Silver is another precious metal that is popular among those looking for alternative ways to produce a good rate of return on an investment. The price of silver often tracks or parallels the price of gold. There is a store of value or continual standard of value that is a part of a silver investment. The price of silver is analyzed frequently by those financial analysts who are tracking gold as well. Economic concerns about inflation and other national financial uncertainties have created a rebound in the price of silver over the past few years. Silver coins are a popular investment, and these silver coins are legal tender in some U.S. states. Silver industrial applications include jewelry uses and medical uses.

The silver market is smaller than the gold market. This bullion market tends to be up to 18 times smaller that the parallel gold market. Silver prices can be driven by short selling strategies or short position holdings with some of the major investment firms. There is a reported shortage of above ground silver available for investment as well. There are increasing uses for silver in several industrial markets. The market prices for silver have been unpredictable and profitable.

The precious metals investment markets are an effective and profitable alternative investment market. This type of investing is static in that there is only a certain amount of the commodity available. Profits can be gained during economic downturns and during international credit defaults with traditional investments. Precious metals are viable investments for those seeking a standard investment that can be stored for future use and value. Some gold and silver coins are used as legal tender and can be easily exchanged for national currency. Monex Precious Metals have an alternative and profitable investment strategy.


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