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Precious Metals and Their Place in the Investing World

Updated on November 16, 2016

Investing in precious metals has become more and more common as the years go on. The most common precious metals include gold and silver but platinum and palladium are lesser-known but are perfect for investors who want to invest in something else. Platinum, which is 10 times rarer than gold, is so rare and in such high demand that the price is always fluctuating. This makes it very risky for investors but if you buy low enough you can yield a very big profit when the price goes up. As you can see, there are various types of risk for every type of investor.

As with any type of investment, there are pros and cons to the decision to invest. Investing in metals is no different. For example, gold is considered a safe investment to many people. Which this might be a con to some investors who want to see a quick return on their money, many people might see it as a pro. There will be a great return on the money invested but it will happen over a longer period of time. For instance, the price of gold increased 270 percent between the years of 2005 and 2014. Another pro of investing in gold is that it’s super easy to start and keep investing in it. While many broker try and steer clients away from buying gold, it is easy to get it without a broker. If your broker is very adamant about not physically owning gold, they might suggest investing in a mining company who mines gold. On the other side, investing in a gold mining company keeps you one step away from the gold itself which defeats the purpose of investing in the first place. As I mentioned before, brokers are not very supportive of physically investing in gold. Many investors would consider this a con since someone is standing in their way of investing how they want. Clearly, there are many pros and cons to investing in gold. They definitely need to be weighed by potential investors before investing.

Silver is another precious metal that can be invested in and bought. Silver can be used for many different things. One of the main uses are for industrial projects since they are very conductive. It is also very malleable making it a very versatile metal. Silver can also be found in many scrap metal piles. Since it is becoming more popular it is found less and less in scrap metal but there always might be a bit laying around somewhere. Although there are a few pros in investing in silver, one major con to it is that there are always many new investors looking to buy silver. This creates instability in the market when looking for silver and getting a good return on your initial investment. One of the best ways to buy silver is through funds such as iShares Silver Trust which is making it easier and easier for regular people to gain access to the silver market.

Platinum is a very rare metal which I stated earlier. Since it is very rare, it is very expensive. Despite its high price tag, it is becoming more popular in the investing world. It is very eco-friendly and also non-corrosive which is why it is so sought after. Platinum is very liquid which means it can be exchanged for cash very easily. It is a very safe choice for investors since it is showing a steady increase in price with very few fluctuations in the market. Also, since the demand for platinum is so high, it ensures that the price will rise in the future. There are many pros to investing in platinum, but there is also many cons. There is not much financial history attached to platinum which might cause people to take less risk when investing in precious metals and decide to go with gold or silver. Another problem a platinum investor might face is trying to keep it safe and find a place to store it.

While there are many pros and cons to investing in precious metals, investing in any type of metal is guaranteed to give you some type of return on your investment. It may not be a huge investment like many people would like but even a small profit is still considered a profit.


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