Since the dawn of civilization, silver, and gold have been recognized as valuable. And today, a savvy investor has precious metals in their portfolio. But how to choose which precious metal is best for investment purposes? Consulting a recognized commodities brokerage to see if investing in precious metals is right for you is an important first step. Birch Gold has been in business since 2003 in Burbank California. They successfully represent thousands of American investors in precious metal holdings. If you’re considering investing in precious metals here are some helpful tips to get you started. There are a number of ways to buy in precious metals such as gold, silver, and platinum, and there are plenty of reasons to fill your chest with this investment.
All That Glitters
Gold is known for its durability (it doesn’t rust or corrode), it is malleable and has the ability to conduct both heat and electricity. It has minimal industrial applications except in dentistry and electronics, but primarily it is best known as a base for jewelry.
The market determines the value of gold. If there is a massive sell-off price drops and if a new supply is found, it is quickly consumed, and prices rise.
There are several factors that account for an increase in hoarding gold:
When economies or banks are seen as unstable, people generally turn to gold as a safe investment.
When inflation drives balance sheets into the red, investors turn to gold because it holds its value.
War or Political Crises
Political turmoil has always turned people towards hoarding gold. It is a tangible commodity that can be easily stored, moved and sold or traded.
The Silver Bullet
Price fluctuations in silver are more volatile than gold because not only is it a store of value but it is also used in manufacturing subject to the whims of the market.
Investors like silver because it is tangible and something that can also be quickly offloaded in times of crisis. But the violability of the price can make it a riskier investment. That equation has always fluctuated with innovation.
For example silvers role in the photography industry had faded in recent years because of digital cameras while explosions of middle-class societies around the globe have created a huge demand for electronics – many of which use silver in their components.
These technology changes directly affect the value of silver as an investment but the desirability of it long term and in times of political and economic strife means it stays a favorite vehicle to store wealth.
Platinum is a popular precious metal in times of prosperity as it is a rare commodity that often commands a higher price that gold with less of it being pulled from the ground. But that doesn’t mean it isn’t without its challenges.
Not unlike Silver, Platinum is an industrial metal. The automotive industry is the largest consumer of platinum – using the metal in reducing harmful emissions. With new government initiatives coming nearly daily on lowering emissions, platinum is in high demand, but technology is improving, and some manufacturers are reusing old platinum or using other methods for reducing pollution. Another issue that creates volatility is that two countries, Russia and South Africa control the production of platinum. This situation can lead to artificial prices and unsavory business practices.