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Market Oracle FREE Newsletter


Everything you needed to know about investing in precious metals

Commodities / Gold & Silver 2020 Mar 03, 2020 - 04:49 PM GMT

By: Sumeet_Manhas


Gold. Silver. Platinum. Palladium. Precious metals mined from the bowels of the earth, refined and valued for their unique characteristics.

Since the beginning of civilization itself, humanity has long held an obsession with what is known colloquially as “bling.” Nowadays rather than adorning ourselves with beads and seashells, we’ve turned to precious metal.

If one thing’s for certain, it’s that investors have always turned to precious metals in times of economic uncertainty. Whether it’s their tangible presence as hard assets or long history as a safe haven, precious metals are a great investment.

However, investing in precious metals isn’t just about snapping up bars of gold or silver easily. You have to check the future silver price predictions on, to make sure your investment is well timed. There’s plenty of research you’ll need to do before making it big.

Fortunately, we’re here to help and we’ve put together a comprehensive guide that shows you everything you wanted to know about investing in precious metals.

1. Do your homework first

Just like any other investment, you’ll need to do your own research before jumping in with both feet. While it sounds simple enough, investing in precious metals such as gold and silver isn’t as easy as it sounds.

You’ll have to contend with global price fluctuations and shifting demand. While precious metals are indeed a safe haven investment, this doesn’t exempt them from becoming a loss-making investment.

All too often, amateur investors are drawn in by the perception that gold is a foolproof investment that guarantees returns. Rather than falling into that trap, do your own market research by studying trends and global economic conditions. 

For example, it is a widely known fact that during times of economic turmoil, investors often short the US dollar in favor of gold-based assets. Hence a fall in the USD usually signifies a rise in the price of precious metals.

Also, always conduct business with a reputable dealer as there are plenty of unscrupulous brokers looking to sell you worthless or overpriced assets.

2. Know what precious metals are on the market

Typically, when one thinks of precious metals, it’s easy to assume that gold is the only type of metal worth investing in. On the contrary there are plenty of different precious metals to choose from. 

From platinum and silver to palladium, dealers usually have a variety of metals in their inventory that come in the form of either coins or bars. Given the high prices usually commanded by gold bullion, you may even opt for something more affordable such as silver or platinum.

Often overshadowed by gold, platinum is one of the most commonly used metals in the world and has been found in industries as diverse as weapons manufacturing and dentistry. 

Don't buy into the hype that gold is the only precious metal worth investing in, with so many alternatives available, there's no harm starting small.

3. Learn how to invest in precious metals

Now that you’ve learnt how to recognize the variety of precious metals available, it’s now time to actually get investing.

The simplest and most straightforward way to build your portfolio is through actually buying said precious metals. You can choose between purchasing jewelry or investment-grade bullion such as coins or bars.

Jewelry is able to serve as both a decorative item and an investment. Alongside this, jewelry made from precious metals are usually more affordable than bullion. Unfortunately, jewelry may not be as widely accepted as bullion which can make liquidation tricky.

Besides investment-grade bullion and jewelry, you could also opt for purchasing shares in companies that mine precious metals. While you won’t be able to purchase any precious metals physically, shares are significantly more liquid and stand a better chance of appreciating in value.

However, as is commonplace on the share market, there is an element of risk involved when purchasing shares which means that you’ll need to be extra careful.

So, there we have it, a list of everything you’ll need to know about investing in precious metals. Given the uncertainty of the near future, precious metals are sure to be a great investment.

By Sumeet Manhas

© 2020 Copyright Sumeet Manhas - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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