The price of an ounce of gold has dropped to $1,770 from about $2,070 in March 2022, as central banks worldwide increased interest rates to reduce inflation, according to Reuter’s latest report. Despite gold prices falling, people are still investing in it. Typically, gold maintains its value in times of geopolitical crisis and economic downturn. This makes it a valuable investment asset to protect your money against inflation.
But gold isn’t the only precious metal worth investing in. You can buy silver, platinum, and palladium and then sell at a higher price in the future. Even more interesting, there are many ways to invest in these rare metals. Note that each investment option has its pros and cons. So before investing in precious metals, you need to research and choose one that suits you well. Below are a few precious metal investment options worth considering.
Physical Precious Metals
Buying coins, bars, and jewelry is the most popular method of investing in gold, silver, and other precious metal. In most cases, investors buy and hold precious metal coins and bars to sell at a high value in the future. However, before investing in physical gold, silver, or platinum, there are several factors you must consider, and you need to find out the spot price of physical precious metal.
As an investor, you want to be sure you can purchase your desired precious metals at the base price or current market value. You can get accurate details about gold, silver, palladium, and platinum spot prices on online sites. Other considerations when buying precious metals include ongoing costs of ownership, like insurance, storage and security. It’s also worth noting that bullions and coins are difficult to trade, redeem, or exchange. Some countries like the US consider physical precious metals as collectibles and charge high tax rates when you sell them.
Precious Metal Certificates
This is one of the best ways to invest in precious metal without worrying about their storage and insurance. As the name suggests, precious metal certificates are certified documents of ownership of gold, platinum, or silver. Ideally, the issuer of the certificate or precious metal seller is promising to exchange the document for coins or bars upon request. But the investor doesn’t own the physical metal.
You can buy certificates of allocated or unallocated precious metals. Typically, allocated precious metal certificates correspond to a specific number of bars, while unallocated certificates don’t match specific bullions. Also, unallocated certificates don’t offer direct ownership or title to bars. Besides reducing the stress of owning physical precious metal, certificates guarantee low mark-up prices.
Commodity ETFs
Exchange-traded funds or ETFs are becoming an increasingly popular investment option globally because of their liquidity. ETFs also provide a convenient way to buy and sell precious metal shares on the stock exchange market without the burden of storage and security. Note that traders measure the value of exchange-traded funds in the value of the precious metals within that ETF. Buying ETFs allows you to invest in professionally managed shares similar to mutual funds and more secure than precious metals certificates.
Gold and silver have been used to store wealth for centuries. Today’s investors still use them, along with other rare metals like palladium and platinum, as a hedge against inflation. Modern investors also choose different methods to invest in precious metals. Besides buying and holding coins and bars, you can invest in precious metal certificates, ETFs, mutual funds and options, and mining royalties.
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