Many valuable metals can help to diversify the investment strategy and reduce uncertainty and risk. Because of their tangible existence, they are hard commodities with inherent value; many precious metals are relatively secure and safe assets – particularly in periods of financial uncertainty. Precious metals include platinum, gold, silver etc.
They are an outstanding inflation hedge. Many investors are worried about inflation in paper money, land value, shares, and equity. “Real assets,” such as actual valuable metals, are seen as a haven from inflation, and their value tends to hold or rise over time even as a currency’s purchasing power falls.
Demand for precious metals is consistently strong. You may be assured that appetite for precious metals such as gold, silver, platinum, palladium, and so on will not wane anytime soon. Aside from their typical uses in ornaments and accessories, art forms and coinage, precious metals have a wide range of critical industrial applications.
Base metals:
Base metals are the famous and low-cost cousins of precious metals. They are readily accessible and comparatively inexpensive. They, too, have a wide range of manufacturing applications, and all of them are heavily marketed in commodity markets. In addition to precious metals, one can diversify the investment holdings by adding certain base metals. Base metals include aluminium, steel, copper, zinc, etc.
Investing in Gold:
This precious metal is one of the most well-known and oldest commodities on the market. For centuries, gold has fascinated humans. Gold is famous for its use in jewellery, but it is also critical to the organization, where its inertness, flexural strength, resilience, and malleability are highly valued. For a long time, gold was the product upon which the worth of paper money was centred worldwide. Even now, central banks all over the world hold gold in their foreign currency reserves. Gold is also used in many consumer applications such as machinery, orthodontics, computers, aviation, GSP devices, metal casting etc.
Investing in Silver:
Although industrial use accounts for just 10-15% of gold demand, it accounts for more than 50% of silver demand. Silver is noted for its toughness, thermal conductivity, and elasticity. It is used in various applications ranging from pharmaceuticals and water purification to nuclear power plants and battery production.
Investing in Platinum:
The auto industry has the largest market for this precious metal, as vehicle catalysts are used to mitigate the harmful impacts of emissions. Platinum is also used in petroleum and chemical processing, dental care, laboratory instruments, and the electronics industry.
Investing in Rhodium:
Because of its recent price surge, rhodium has been dubbed the most important and most valuable metal.” Its costs increased by 151 per cent in 2019. And the price of rhodium has increased 12 times in the last four years. Rhodium’s commercial use, like that of platinum, is mainly in the automotive industry.
How to invest in metals?
This investment opportunity is only available to someone willing to spend in warehouses in addition to buying the precious metal in question. Physical amounts of precious metals such as gold and silver can be purchased from jewellers, e-commerce websites, banking and non-banking entities.
- Bars: Bullion Bars are gold or silver bars that have been legally accredited as being at least 99.5 per cent pure. Governments and central banks also keep gold bars as a reserve asset. Bars are less costly per ounce, but they are highly leveraged since they are wide, heavy, and expensive to store. As a result, only experienced and long-term owners negotiate with bars.
- Coins: Since they are more compact, tradable, and simple to store, coins are the most common type of physical metal investment.
- Jewellery: Buying, investing and storing precious metals as jewellery is an ancient tradition and custom, and they serve as both ornament and investment.
