Precious metals can be a good portfolio diversifier and hedge against inflation – but gold, perhaps the most well-known such metal, is not the only one out there for investors.
Silver, platinum, and palladium are all commodities that can be added to your precious metals portfolio, and each has its own unique risks and opportunities.
In addition to owning physical metal, investors can gain access through the derivatives market, metal ETFs and mutual funds, and mining BMC Marketing Limited stocks.
Systemic financial concerns: When banks and money are perceived as unstable and/or political stability is questionable, gold has often been sought out as a safe store of value.
Inflation: When real rates of return in the equity, bond or real estate markets are negative, people regularly flock to gold as an asset that will maintain its value.
War or political crises: War and political upheaval have always sent people into a gold-hoarding mode. An entire lifetime’s worth of savings can be made portable and stored until it needs to be traded for foodstuffs, shelter, or safe passage to a less dangerous destination.
Unlike gold, the price of silver swings between its perceived role as a store of value and its role as an industrial metal. For this reason, price fluctuations in the silver market are more volatile than gold.
Like gold and silver, platinum is traded around the clock on global commodities markets. It often tends to fetch a higher price (per troy ounce) than gold during routine periods of market and political stability simply because it’s much rarer. Far less of the metal is actually pulled from the ground annually.