Precious metals make for excellent portfolio diversifying assets besides serving the traditional purposes of wealth preservation and growth. Each metal has its unique characteristics and place from its value and demand stems. Even though precious metals do not experience the same level of price fluctuations and volatility in rates as the share markets, some precious metals are more volatile than others. this makes them a lucrative investment avenue. Here are some physical precious metal investment options that one can enter at any time.
It makes sense to start with gold as it has endured for centuries as a coveted wealth-creating precious metal. The value of gold in the form of bullion bars and coins is much more than gold jewelry as in bullion form, gold is purer than jewelry which is an alloy of different metals. Some gold coins have a higher premium attached to them as collector’s items. The prices of these coins at the time of reselling only increase with age and condition.
Next to gold, silver is the most popular precious metal and the cheapest among all precious metals. So, if you are new to investing, or have limited resources, you can start with silver. Silver has widespread use in various industries due to which its price fluctuates. Thus, you can trade in silver more frequently by following the rise and fall in its demand and supply. Precious metals in the form of heavier weights of bars have the lowest premium attached to them as they are easier to manufacture. So, instead of buying smaller quantities of expensive metals such as palladium, platinum, or gold, one can buy heavier weighing silver bars at the same rate for similar returns.
Platinum is used in manufacturing catalytic converters and jewelry. It is scarcer than gold and thus it is more expensive than gold and silver. Though gold has outperformed platinum in recent years, platinum is a major investment metal due to which it doesn’t experience the same kind of downtrend as silver and gold and is more stable in different market conditions.
Palladium has a lot of application in the automotive industry and its market is like that of platinum in precious metals. As palladium supply worldwide is depleting, the demand and price of the precious metal are increasing immensely. Palladium fills the space for portfolio diversification as its prices rise and fall unpredictably and are low-risk investment avenues.
All precious metals bullion has a premium attached to them which includes their making charges, packing charges, and overheads of the mint and the dealer. Thus, though the bar or coin is valued at the spot price of the day, one must pay an additional premium at the time of purchase which won’t be repaid at the time of selling. Still, as a physical investment class, they are an asset that preserves wealth as they are low-risk options. The returns on precious metals investment are always derived over the long term as their prices rise steadily. Hence, they are a good hedge for a portfolio.