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What Precious Metal Should I Invest In?

Friday, October 20, 2017

If you’re a first time investor looking to make the most money from precious metals, it pays to do your research before you start parting with your cash. Apart from the prices, which vary widely, the properties and practicalities of each metal mean that they each have something different to offer investors.

Here’s a quick breakdown of the main types of precious metal bullion and which ones might be the best investment for you.

Gold bullion

Gold is known as a reliable investment. Historically, we have seen gradual rises in the gold price over time. This precious metal tends to hold its value. While national currencies are subject to economic volatility, demand and prices for gold tend to increase as economic outlook decreases.

Consequently, the gold price rose to new highs after the financial crash, peaking around 2012. This has since reduced, but global recent political uncertainty during 2016 and 2017 is causing prices to rise again.

For this reason, gold is largely seen as a good commodity for the protection of wealth over time. The fact that it’s a very dense metal also means that it is practical for storing a large amount of wealth if you want to buy gold bullion.

Silver bullion

Historically, silver prices were more volatile than gold, but in recent years this hasn’t always been the case. Though silver is much less valuable than gold, its value tends to increase and decrease broadly in line with gold.

The fact that silver is less valuable than gold means that it can be the metal of choice for investors looking to buy and sell on a smaller scale. If you’re looking to invest a lot of money in precious metals, however, it may prove more difficult and even potentially impractical to invest in silver in such large volumes if you’re seeking to buy physical silver bars.

Platinum and palladium bullion

Palladium and platinum have very similar properties to one another. Both of them are rarer than gold and are almost exclusively mined in South Africa. They are more often mined as by-products of other metals than on their own, and demand for them can change very drastically over a short period.

The prices for these precious metals are much more volatile than gold because the variations in supply and demand greatly affect the prices. This creates opportunities for investors who are looking to make a sharp profit – but of course comes with a much greater risk than the more predictable behaviour of gold and silver.

Unlike gold, the price of platinum and palladium tends to increase in times of economic stability, and decrease during volatility or crisis.

The right previous metal depends on your personal circumstances and appetite for risk. Whichever you choose, be sure to keep an eye on the prices to get an understanding of the market before you invest.