“Gold and silver are money, everything else is credit.” This was stated by intuitive financer J.P.Morgan (of JP Morgan Chase investments), way back in 1912. A century later, metals continue to seduce many an investor. Today, precious metals or commodities can be easily bought from certified online dealers (like globally approved vaults), or through privately-owned bullion programs like https://www.goldbullionaustralia.com.au/.
In this blog, we look at top 4 metals that are good to include in your buying and selling portfolio.
GOLD
Current market value: $1,785.00 per ounce (USD)
You know the saying “worth its weight in gold”. Yes, this metal is the lofty standard based on which every thing else is measured. (Even currency!) It is a highly durable metal, excellent conductor of electricity, and is arguably the most dazzling of them all. It has also withstood the tests of time and changing society. Here are the top pros and cons with including this precious metal in your trading portfolio.
Pros:
- Most precious, used to back currency value in many countries.
- Large number of uses, including banking and finance industry, jewellery, electronics, big pharma (due to medicinal properties).
- Easy to liquidate.
- Always valuable, like real estate.
Cons:
- Consistently expensive. This can be a challenging investment for beginners with a small portfolio. So if you are dipping your toes in metal trading, consider buying a small portion to even out the risks of your other investments.
- Rare metal. Approx availability of 3,000 tonnes per year (This also makes it more valuable every year).
- Storage can be a hassle. Coins versus bars versus jewellery (which can also have wastage).
- Not sold easily. Also sold with premium by seasoned traders.
Closing tip: Its difficult to lose money investing in gold honestly, especially if you’re a seasoned trader and in for the long haul. If you have deep pockets and are looking for that one investment to even out your risks, invest in gold.
SILVER
Current market value: $23.09.00 per ounce (USD)
If you’re looking at the cost, you’re sure to notice it is a tiny, miniscule fraction of gold pricing. This is also the reason it is traded more easily and more often than gold. But just like the yellow metal, silver investments have long legs. They also go through more fluctuations in the market then gold investments.
Highlights:
- Second in popularity, next to gold. Can also used to back currency value in some countries.
- Wide variety of uses, perhaps more than gold. This includes artisan industries (jewellery, coinage, tableware), electronics, solar panels, pharma, etc. Yes, silver trading is unlikely to ever go out of fashion!
- More widely available then gold. (Approx 25,000 tonnes mined per year – 5 times more than gold!) This also means that it is being mined aggressively at the moment.
- Large players tend to monopolize the market.
Closing tip: Excellent investment for beginners due to its affordability and availability. It also comes with less risk, and offers smaller rewards.
PLATINUM
Current market value: $890.04 per ounce (USD)
This white metal may seem like a newer entry into the market. And yet, it has been around since the early 20th century. Unlike gold and silver – which are considered staples in an investment portfolio, platinum has been used to generate quick income for a short period of time. This has changed significantly since the great crash of 2008, when it fell to one-third its value in less than 6 months! It has since been traded cautiously, and in smaller quantitates.
Highlights:
- Super rare, with just 200 tonnes mined every year. That’s less than 10% of gold!
- Used in chemicals industry, electronics, jewellery (not as much as gold or silver), healthcare (medical equipment), and some pharmaceutical industries.
- Traded in limited qualities, also due to poor resale value.
PALLADIUM
Current market value: $ 2105.47 per ounce (USD)
Yes, palladium is indeed currently more expensive than gold! But this is largely driven by the supply-demand ratio and its aggressive use in the automotive industry. Experts believe that this metal will eventually have a steep fall in the market, when the current automotive industry is disrupted with the popularity of solar and electric powered vehicles. So, make hay when the sun shines!
Highlights:
– Extremely rare, just like platinum (less than 200 tonnes mined every year).
– This metal began with a modest value, but has exponentially multiplied in value due to demand/supply ratio.
– Heavily used in automotive industry, and this has skyrocketed its current value to higher than gold!
– Also used in electronics, jewellery, and healthcare (dentistry) industries.
In summary, investing in precious metals is highly recommended for a diverse and resilient portfolio. Metals like platinum and palladium offer large returns in the short term, while metals like gold and silver consistently deliver stable returns over the long term. Consider commodity trading to strengthen your portfolio, so it can withstand inflations, recessions and other volatile market changes.
