We can all agree that precious metals are valuable due to their rarity and importance that have for our society. Since there are a limited amount of these materials and the production is also at its rare moments that is the significant reason that drives their value.
You can invest in golden bars, silver coins or platinum eagles, and in all cases, you will be able to get the safety and stability of investment as well as the ability to improve your ROI.
We can differentiate the three most distinctive precious metals that are worthy of investment:
It is a known the fact that gold is the most popular precious metal in the world for both governments and individuals for thousands of years. It first became valuable due to its ability to reflect light and that shine allowed people to enjoy in its look.
At the same time, gold features, double role, because you can use it as a financial application or within the industry for various purposes. Since it has high resistant to heat, it conducts electricity, and it is malleable, which are the main characteristics you should remember.
According to statistics, 10% of gold is used for industrial purposes such as medical, dentistry and electronics sectors. Gold is most popular due to its ornamented features, and it is widely accepted as part of jewelry, which demands up to 50% of annual production.
Finally, yet importantly, you can use the gold as money so that you can purchase it around the world and use it as a financial asset that will provide you ensured return on investment.
The calculation brings us to 40% of gold production that enters holdings and stockpiles by governments and investors from all across the globe. The price tends to rise as soon as the demand increases, and countries own 30% of gold ever produced in the history of the world.
The gold production is primary, which means that companies extract it from the earth and that is their primary business. On the other hand, silver is secondary output, because it is derived as a byproduct of lead, zinc and copper production.
However, silver is also in demand when it comes to investment abilities. Since it features industrial uses, you will be able to purchase it as well, and you will obtain a stable investment portfolio.
The best way to learn more on silver is by clicking here for more information.
You should remember that platinum is quite rare and only 250 tons of it gets produced each year which is significantly less than 3000 tons of annual gold production.
It features industrial applications because it is highly resistant to heat, and it is precious metals, which makes it a perfect solution for investors to use it as a stock investment.
The Financial Characteristics of Precious Metals
Three precious metals we have mentioned above are different from other commodities when it comes to buying them as investment assets.
Since the prices of other materials tend to move lower and higher in the system based on various factors, precious metals tend to compete against currencies instead.
We are talking about coins and paper notes that are printed as governments, which means precious metals are considered as money on the investor’s market. The currency note has value because the government dictates that they should.
Since a nation or a country controls the flow of currency on the market, value tends to fluctuate. On the other hand, with precious metals, the stockpiles and mine production will determine whether they are available or not.
Therefore, people would rather have more faith in gold than saving the cash, which is why the currency value declines and people are in need to invest in protecting their assets.
If you wish to become a hedge saver and investor, entering the precious metal market could help you get the recognition you want. Since this market tends to offset the effects of inflation, you will be able to use it as part of your investment or saving program.
The value of precious metals will retain the value, and as people are losing faith in real money, the value will increase exponentially.
Therefore, having them means that you will store wealth that can give you always the return on investment, and you can even get a profit if you are patient enough.