Should You Invest In Precious Metals?

Written By Alla Levin
June 01, 2020
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Should You Invest In Precious Metals?

Precious metals have been a consistent investment option over the years.

By definition, they derive their value from physical rarity, which gives them a consistency that other portfolio options will struggle to match.

Futures exchanges around the globe have long used gold, silver, and platinum as a powerful source of security, and they can be a useful addition to your own financial investments.

Only a limited amount of these resources are extracted per year, passing through places such as ABC Refinery before entering into circulation, which means their value is all but guaranteed.

So if you haven’t already, should you be adding precious metals to your portfolio?

How Do I Invest In Precious Metals?

There are a couple of ways into investing in precious metals.

You can, of course, buy bullion metals, bars, or coins, or you can get a route in through financial products, like gold-exchange traded funds.

This can be slightly more convenient, but it does mean you don’t actually own the metal itself.

When you buy bullion or other physical forms of precious metals, you own an asset that sits slightly outside of the financial system itself, and so is removed from the fluctuations and risks somewhat.

As this is what most investors will be looking to achieve, it’s usually the best option overall. 

Gold, Silver, Or Platinum?Invest In Precious Metals

When it comes to deciding which metal to go for, you also have choices. For most investors, gold is the smarter choice.

Its price is less subject to peaks and troughs than that of silver and is less related to other economic activity and more driven by factors such as the jewelry market and investments.

Silver and platinum both have more industrial uses, which can be useful if you can buy them cheaply.

Silver is ultimately more accessible though, and platinum harder to source and a lot more expensive.

You may choose to spread your portfolio over two or three metals to aim for economic stability. 

Protecting Your Investment

Investing in bullion is unlike any other investment.

Unless you have an extremely secure property, it’s usually unwise to have it stored at home.

Instead, you will need to purchase through a licensed precious metals dealer who offers a buy-and-store program where the metals are kept safe for you in a secure vault.

Should you come to sell your precious metals, this can also help as the chain of custody and therefore the veracity of the metals is not in any question.

If you’re choosing to invest in coins, always opt for the better-known ones – English Brittania, Austrian Philharmonics, American Eagle and South African Krugerrand are all excellent choices to start with.

In a world that seems to be getting less secure by the minute, purchasing precious metals to diversify your financial portfolio can offer some welcome security.

Including it as a part of your investment strategy ensures you can work towards a more evenly balanced and stable spread. 

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