When investing into the precious metals market, you are investing into a real commodity. In most every other market, the investment that you are making is into a cash representation of a commodity rather than the commodity itself. In addition to being commodities, many of these metals have been used as currencies in the past. When investing in this market, you will be investing your money into either gold, silver, platinum or palladium.
Confidence and Gold Values
The first thing you might think about when investing in the precious metals market is gold. This is because it is one of the most recognized currencies in the world. While the current monetary standard is no longer based on gold, it is still recognized as a currency that can be used when all else fails. This is why when the economy is in flux more people turn to gold and the prices jump. As evidence that gold is a highly valued currency, banks like the Bank of Korea and other central banks, have been buying up gold reserves.
The Many Uses of Silver
While gold’s main value is that it is attractive, silver has many industrial uses that add to its overall value in the precious metals market. This includes the uses it has in jewelry and currencies, but it also has to do with the value that the industrial sector puts on silver. Silver retains properties that make it highly conductive, which is why the technical community appreciates its use for wiring and contacts. In addition, silver is used often in the biotech industry because of its ability to stop bacteria from growing.
Highly Valuable Platinum
The most value of all the precious metals is platinum. This is because of the scarcity of the metal in addition to the beauty and industrial applications of the metal. The main way that platinum is used is to make catalytic converters. This is because of the chemical properties in the platinum and how they help to remove pollution from automotive emissions. This is why platinum is more valuable during times when more emphasis is placed on environmental issues.
The Industrial Necessity of Palladium
Palladium can be used in just about the exact same applications as platinum. Because this metal costs less, it is something used whenever platinum is needed, but cannot be afforded. Used in catalytic converters, it is a highly useful metal necessary for several industrial purposes.
The Danger of Commodity Futures
One way you can get started in the precious metals market is to invest in commodity futures. This is possible with all of the different forms of precious metals. In essence, what you are doing is betting against the way that certain metals will be traded. The difficulty that investors face is that the market may shift at any given time causing those invested in the market to lose their investment overnight.
More Stable Commodity ETF
If you are still looking to invest in the precious metals market, but you do not want to invest in futures or the actual metal, you can invest in exchange traded funds (ETFs). These are shares that represent the metals rather than their perceived value or having to stockpile the metal itself.
Investing in Mining Companies
Another option available to you is to invest in the companies that are responsible for mining the different kinds of precious metals. When investing into the precious metals market through this method, it is important to keep in mind that the opportunity to make money through these investments will have more to do with the success of the mining company itself rather than the value of the metals on the market.