Investments

What Is The Best Precious Metal To Buy

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 9 minute read

Of all the precious metals, gold and silver are perhaps the first that spring to mind. Most individuals would struggle to list five different types of precious metals.

You may have heard that investing in precious metals is a good way to guarantee your money is always safe. Now that you’ve researched gold bullion, silver coins, and perhaps even genuine platinum, you may be wondering whether they are your only options.

No! Several metals are considered “precious” and are good safe-haven investments. If you’re not into buying physical silver and gold coins, or if you’d like to diversify your safe-haven assets without veering too far from precious metals, you’re in luck: you have choices.

What Exactly Are Precious Metals?

Precious metals are metals that are extremely uncommon and hence very valuable. Most precious metals are resistant to oxidation (rust) in everyday environments, therefore their monetary worth is stable over time.

You may put on your silver necklace and gold ring whenever you choose. Your ring and necklace will never rust or degrade; all they’ll do is gather dust and require the occasional cleaning. Moreover, gold and silver are so uncommon that their value remains high even in times of economic instability.

Why are investors drawn to precious metals?

When the economy is in a slump, many savvy investors diversify their holdings by purchasing precious metals. Precious metals are a fantastic store of wealth in times of economic and market uncertainty because they give security from market instability and typically witness price rise during economic recessions.

Even when the economy is doing well, precious metals are a popular investment option. The electrical, automotive, and battery industries could not function without the use of these metals. Due to their high worth, precious metals are a must-have for each diverse investment portfolio.

Other Precious Metals Besides Gold and Silver

While gold and silver are traditional safe haven assets, there are a number of other metals that may be purchased if you wish to diversify your portfolio within the precious metals asset class. Popular investments include:

  1. Copper

Although copper is not technically a valuable metal, this does not stop it from being referred to as one. Copper, for example, oxidizes in air and water. In addition, the metal is easily accessible all over the world, meaning it is not rare enough to qualify as such.

Although it has many practical applications, some people value the metal highly because of its scarcity. Copper is extracted from the ground by excavating pit mines and extracting copper ore, which is rich in copper and, in many cases, iron compounds.

Uses

As such, copper finds widespread application in the manufacturing and business sectors. Copper is a widely utilized metal in electrical applications due to its excellent conductivity of electricity. Copper is also frequently found in motor-running components.

  1. Iridium

Iridium is a metal that is commonly found in platinum jewelry. It has the appearance of silver, but is actually a hard, brittle metal. Iridium is one of the rarest elements on Earth and is thus incredibly expensive due to its exceptional hardness, high melting point, and rarity.

Similar to other precious metals, iridium is resistant to oxidation in everyday settings. It has an exceptionally high resistance to corrosion. In addition to its practical use, it is also a highly sought-after collectable item because of its scarcity and high value.

There are two primary routes for iridium’s production. Since nickel is mined from the same geological formation as iridium, iridium is often recovered as a byproduct throughout the process. However, there are specialized mining businesses that extract iridium from platinum ore.

Uses

Iridium, just like other valuable metals, serves a wide variety of purposes. Its primary use is as a hardener for a variety of platinum alloys. Compass bearings and pointing pins are two common uses for these metals.

The valuable metal serves as a material for robust electrical connections and crucibles, and it is also employed in high-temperature equipment.

  1. Lithium

The valuable metal lithium has several uses. It is deposited in rocks and brines all over the planet, but only in trace amounts, making it a very uncommon element.

The silvery-white metal lithium has pliable properties and finds usage in a wide variety of global applications. The basic material from which lithium is derived—lithium salts—is widely distributed across the globe. There is a broad variety of sources for these salts, including subsurface clay and mineral ore deposits, geothermal brines, and even ocean water.

Uses

Several different kinds of uses may be found for lithium. The most common application for gold is in batteries for things like electric vehicles, solar panels, and even boats. Recent increases in the metal’s value are often attributed to its widespread use as a battery component for electric vehicles.

In the field of psychiatry, lithium is commonly used as a stabilizer. Mood disorders such bipolar disorder, significant depression, and schizophrenia are treated using lithium compounds.

  1. Osmium

Osmium is a platinum group metal that is highly prized. The metal has a silvery blue color and a rough, brittle texture. Because of its rarity and versatility, osmium has a high market value.

Since osmium concentrations in these deposits are so low and difficult to detect, osmium is more effectively generated as a byproduct of nickel refining processes. Osmium may be found naturally in platinum-bearing river sands in North America, South Africa, and the Ural Mountains of western Russia.

Uses

Despite its limited industrial use, osmium is nevertheless an important element. Osmium is a common component of platinum alloys and has also been used in fountain pen nibs, instrument pivots, needles, and electrical connections.

  1. Palladium

Investors place a high value on palladium because of its rarity. Corrosion doesn’t stand a chance against its formidable resistance and stunning silvery white finish. Palladium is a soft metal that is extremely uncommon, making it substantially more costly than silver or gold due to its scarcity.

Palladium occurs in minute quantities in both nickel and copper ores. Since large quantities of nickel and copper ore are processed, even relatively tiny concentrations collected as a byproduct can provide a significant source of additional revenue for mining corporations.

Uses

The catalytic converter in your car is where palladium is most commonly used, so it’s possible that you already have a tiny quantity of the metal. But that’s not the only thing you can do with metal for.

Dental fillings, dental implants, and surgical equipment are just a few of the many uses for palladium in the medical field. Jewelry, spark plugs, and electrical connections are just some of the other places you may find the valuable metal.

  1. Platinum

Platinum has a white or silvery appearance and is an extremely malleable metal. It was the Latin word for “small silver” that inspired the name platinum. The precious metal is not only extremely corrosion-resistant, but also highly conductive and stable at elevated temperatures.

It is often extracted from deep pit mines in South Africa, where it is found naturally deep within the earth’s crust.

Uses

Platinum may be most known for its usage in jewelry, but it has many other applications as well. Dental work, medical equipment, and laboratory apparatus are just few of the many medical fields where it finds use.

Platinum may also be found in the world’s most powerful magnets. Platinum’s strong conductivity also makes it useful for other applications, such as electrical connections and low-resistance lines.

  1. Rhodium

Rhodium is a precious metal that is extremely uncommon. It is white in color and has a firm, silvery texture. Corrosion is very difficult to accomplish on rhodium, as it is with other platinum group metals.

Natural occurrences of rhodium are so low that the metal is considered very rare. It is often extracted during the course of mining for something else. This valuable metal may be found in platinum ore and is also present in nickel deposits, but at much lower amounts.

Uses

The precious metal rhodium has several industrial uses. Jewelry and catalytic converters are two common places to find rhodium. However, the metal’s primary application is as an alloying component in platinum and palladium alloys, which may be found in spark plugs for airplanes and other types of medical and laboratory equipment.

  1. Ruthenium

Last but not least, ruthenium is related to platinum metals. The white metal is tough and fragile, but it shines brilliantly and doesn’t tarnish.

The vast majority of ruthenium is gathered incidental to the extraction of nickel. It is isolated from other members of the platinum group, such as platinum, palladium, and osmium, by a series of chemical procedures.

Ruthenium Uses

The commercial applications of ruthenium are diverse. It is a popular addition to platinum jewelry as an alloying agent. It’s a hardener for platinum and palladium alloys, which are utilized in electrical contacts with high demands for wear resistance.

It’s interesting to note that ruthenium is used in several types of solar panels. It is used to harness the sun’s rays and transform them into usable electricity.

Should You Buy Precious Metals?

Almost every modern investing portfolio should include precious metals. Rare and in great demand, precious metals offer a degree of stability that few other assets can match, making them an excellent choice for the safe-haven portion of your investment portfolio.

Therefore, the question is not whether or whether you should invest in precious metals, but rather when.

Due to the correlation between precious metals and the economy, it is prudent to have a low exposure to the asset class during times of economic expansion and market optimism.

However, when the economy falters and the market enters bear territory, it’s important to rebalance your portfolio by increasing your holdings of precious metals and other safe-haven investments.

How to Purchase Precious Metals

People often conceive of purchasing silver and gold in the form of troy ounce bars and coins. Although that can be done, there are other methods to get into the precious metals market, especially if you’re interested in metals that aren’t commonly struck into coins.

  1. Purchase Physical Precious Metals

Buying ingots, coins, or gold bars from Vaulted is one approach to investing in precious metals. Coins and bars of various precious metals can be purchased at market value from a variety of online vendors and brick-and-mortar numismatic establishments.

  1. Purchase Precious Metals Exchange-Traded Funds (ETFs) and Mutual Funds (MFs).

You may invest in precious metals without ever having to handle a single coin if you don’t want to store bars or coins made of high-value metals at home or in a safe deposit box.
Investing in the precious metals market is a popular option, and there are a number of mutual funds and exchange-traded funds (ETFs) dedicated to this sector. To invest in the production of precious metals, these funds aggregate the money of many investors.

By investing in exchange-traded funds (ETFs) and mutual funds, you can relax and let the experts take care of your money. Precious metals exchange-traded funds (ETFs) and mutual funds, like most other investment-grade funds, often engage in high levels of diversification, safeguarding your capital against a sudden drop in the value of one or more of the fund’s assets.

  1. Purchase Mining Stocks

There would be no precious metals available for purchase if mining corporations didn’t exist. These firms profit when the market price of the commodities they mine is high but suffer when it falls.

In turn, the stock prices of mining businesses track the ups and downs in commodity prices. To gain indirect exposure to the precious metals market, you can invest in the mining firms that produce the metals you care about.

Bottom Line

Gold and silver bullion are only a small part of the larger picture of precious metals investing. Investing in precious metals may be done in a variety of methods, some of which don’t even require physical possession of the metal.

Just like any other type of investment, you should do your homework and learn the factors that influence the price of precious metals before you put your money at risk.

Nonetheless, investments in precious metals are a crucial aspect of most well-balanced investing portfolios due to their price stability and protection against inflation.

Curated posts

Someone from San Jose, CA just viewed Best Online Colleges for Master’s Degrees