Precious metals are metals that are rare and have a high economic value due to several factors, including their scarcity, their use in industrial processes, the hedge against currency inflation and their role throughout history as a store of value. The most popular precious metals among investors are gold, platinum and silver. The most common types of precious metals that people invest in are gold, silver, and platinum. Other types of precious metals include iridium, osmium, palladium, rhodium and ruthenium.
The four main precious metals are gold, silver, platinum and palladium. Depending on the application, there are common alloying elements that can be mixed with major precious metals to improve the properties of the final product. There are other items of interest that are also used in jewelry or accessories made of non-precious metals. Although they can carry a certain degree of security, there is always a certain risk when investing in precious metals.
COVID-19 has caused some wild fluctuations in the stock market over the past year, while precious metals have mostly remained stable or experienced gains. Investors should consider that all of these factors serve to make platinum the most volatile of all precious metals. If you want to invest some of your retirement money in precious metals, you might consider self-directed IRAs. Sometimes, the part may contain non-precious metals such as nickel, or even some toxic metals such as lead.
Of course, precious metals are also purchased for industrial uses and for commercial purposes, such as jewelry making. As the price of palladium has skyrocketed, the theft of catalytic converters is on the rise, as they can be robbed by the precious metal. From an investment theory standpoint, precious metals also provide a low or negative correlation with other asset classes, such as stocks and bonds. The best way to invest in precious metals is to buy the metal directly and maintain physical shape or buy ETFs that have significant exposure to precious metals or companies involved in the precious metals business.
Sometimes you have other precious metals that are valuable, such as palladium or platinum, and you can't see them just by looking at the piece. Precious metals are commonly used in jewelry, industrial processes or, very often, as investment vehicles. But which precious metal is best for investment purposes? And more importantly, why are they so volatile? Investing in precious metals has some benefits compared to investing in stocks, such as being a hedge against inflation, having intrinsic value, having no credit risk, having a high level of liquidity, bringing diversity to a portfolio and making it easier to buy. Today, precious metals, which are part of the commodity asset class, are mainly used as a means for investors to diversify their portfolio beyond stocks, bonds, cash and other holdings, partly because they do not track the movements of stock or bond markets.
