Precious metals are metals with an extremely high intrinsic value for either material or internal purposes (such as electronics). Precious metals have long been valued as currency and decorations; and today their value extends across numerous industries.
Many investors choose to acquire precious metals via bullion purchases or futures contracts or exchange-traded funds (ETFs). Other investors may utilize exchange-traded funds (ETFs) to gain exposure. If you’re uncertain about adding them to your portfolio, hopefully this article will help you better understand and make your decision.
Gold
Gold is one of the best-known precious metals, having long been valued and utilized as money for millennia. While paper currencies may experience market fluctuations that impact value fluctuations significantly, gold stands the test of time as an asset that does not depreciate during times of economic instability. Due to its inherent worth and versatility, adding gold as part of an asset-hedging portfolio would only enhance it further.
Gold’s unique properties make it highly sought-after in both pure and alloyed forms. Pure gold can be too soft and ductile for use, so combining it with other metals creates an extremely hard, durable substance. While thin sheets may be pounded into jewelry designs, long wires of pure gold may also be rolled up and melted to form intricate shapes; furthermore it serves as an excellent conductor of electricity, making it suitable for electronics as well as life support devices.
Gold’s primary use has long been in jewelry, since ancient civilizations like Egypt began mining it around 4000 B.C. With its bright silvery appearance and corrosion-resistance properties, gold remains one of the most desirable materials for wedding rings and other ornamental pieces. Various industrial applications make use of its strength and electrical properties.
Pure gold is an inherently colorless metal, yet can be altered into yellow, pink, red and white hues by mixing other metals into it. An alloy composed of 75% gold mixed with 16% silver and 9% copper produces yellow gold; by adding more silver it becomes white gold; adding even more will result in white gold! Gold alloys may also be mixed with other elements to produce black green and purple tones as well.
Silver
Silver is a reflective white metallic element found throughout nature as both pure free element (Native silver) and in various alloy forms with gold or other metals. Like copper and gold, silver acts as an excellent conductor of electricity while also possessing antibacterial, germ-killing, immune-boosting properties which were recognized by Hippocrates (the Father of Medicine).
His documentation of its benefits to health was an impressive testament of silver’s benefits to humankind. Silver differs from gold by being produced as a byproduct from mining other base-metal ores, making its price more volatile than that of other precious metals.
Silver has numerous industrial applications in addition to being used as currency or jewelry, from photosensitive film for photography and radiography, to uses in industrial applications. Photography was once the largest consumer of silver with demand peaking around 40% globally during analogue film cameras’ heyday before digital cameras took over and made photography demand less than 10% by 2013.
Silver’s antibacterial properties have long been exploited in medical applications. Silver nitrate was once applied topically in newborn eyes in order to prevent blindness from maternal gonorrhea; dilute solutions of silver compounds are used as disinfectants and antibiotics in wound dressings, catheters, and other medical devices.
As a collectible metal, silver is highly sought-after for its beauty, ductility and resistance to corrosion. Unfortunately, investing in physical silver can be expensive due to storage and insurance fees.
Alloys of silver have many industrial applications, from electronics and plumbing to dentistry and medicine. Due to its high electrical conductivity and resistance to corrosion and tarnish, silver alloys are an ideal material choice for wiring applications as well as cutlery manufacturing. Their luster and durability also make silver an excellent material choice for award medals such as Olympic and Academy awards.
The IRS taxes silver as collectibles instead of as investment assets at rates that can far surpass those applicable to stocks and bonds. This may lead to losses when selling holdings at auction. Something that can be avoided by investing with companies like Money Metals or similar. Nevertheless many investors use precious metals as diversifiers in their portfolios as prices tend not to move along similar trends as stocks and bonds do.
Other Precious Metals Worthy of a Look
While gold and silver are commonly recognized precious metals for investment purposes, they aren’t alone as valuable assets. Six other precious metals (palladium, platinum, rhodium, ruthenium, iridium and osmium) share similar chemical properties found together in nature to form what are known as Platinum Group Metals or PGMs – known for being extremely dense yet long-lived materials often utilized for jewelry and electronics applications.
These metals are less reactive than base metals and tend to possess a higher luster and be more ductile, making them more suitable as investments. Historically these precious metals were seen as stores of wealth to provide protection from currency depreciation or inflation.
Physical precious metals offer investors an alternative investment with long-term value that has not fluctuated much throughout history. While their short-term fluctuations may cause anxiety among investors seeking alternatives to low-yield bonds or static savings accounts.
As stated previously, all forms of precious metals have long been valued for their historical use as currency and jewelry, but now also possess unique industrial applications. From dentistry, electronics, and medicine to corrosion-resistant mirrors, semiconductors and alloys; as well as key electrical components like batteries – precious metals offer versatile uses beyond their historic use as currency and jewelry.
Rhodium is growing with increasing demand, much like platinum. Both materials can be found in automotive catalytic converters as well as some electronic devices like cell phones and laptops; however, due to being less abundant than other precious metals they tend to experience greater price fluctuation.
Investors can capitalize on the growing demand for metals by investing in companies that mine or refine them. It is one of the largest precious metals streaming companies globally and generates revenue by purchasing a percentage of output from mines that produce precious metals such as gold and silver; additionally it owns and operates refineries where metal is processed into bullion bars for sale to customers around the globe.
Palladium
Palladium is one of the four platinum group metals (rhodium, ruthenium, osmium and iridium) and thus its least dense and lowest melting point member. Like gold and silver, palladium has long been valued for use both as jewelry as well as catalysts and in alloys.
Today, platinum metal is most often seen as an important ingredient in car exhaust catalytic converters (according to this link). These devices convert harmful air pollutants to less hazardous carbon dioxide and water vapor emissions, helping automakers meet government environmental regulations more easily. Unfortunately, its price continues to skyrocket.
Palladium can also be found lining multilayer ceramic capacitors found in laptop and cell phone, dental amalgams, surgical instruments and print media used by fine art photographers. Scientists are researching its ability to absorb hydrogen for fuel cell systems; palladium reacts with hydrogen molecules to form palladium hydride that can then be stored safely in tanks.
Platinum
Platinum is one of the rarest elements on Earth. It can either be found as its native metal, or combined with precious metals like gold and silver found in mined deposits. Thanks to its ductility, durability, corrosion-resistance and chemical reaction resistance properties it plays an integral part of various industrial applications including catalytic converters, jewelry, electrical contacts as well as antineoplastic properties which make it useful in medical implants such as stents and pacemakers.
Platinum’s wear- and tarnish-resistance properties, high thermal conductivity and resistance to oxidation have made it a key element of fine jewelry (https://www.researchgate.net/publication/286129486_Corrosion_of_Noble_Metals) with platinum alloys frequently found in rings, bracelets, pendants watches and other high-end pieces. Platinum’s high melting point and density allow it to be formed into flat sheets, rods, ribbons and wires for various industrial uses.
Its use as an aesthetic metal has led to it being widely utilized for catheters, heart valve stents and neuromodulator devices in medical settings. Platinum’s biocompatibility makes it ideal for implant applications, while its ductility makes it perfect for connecting microelectronics in pacemakers. Platinum forms an integral component of drugs cisplatin and carboplatin which combat cancer cells.
Platinum is used in the production of one fifth of everything manufactured today, according to experts. Due to its hardness, high melting point and resistance to corrosion or chemical reaction it serves as an indispensable catalyst in many critical industrial chemicals like nitrogen fertilizers, fiberglass reinforcement, anticancer drugs and platinum compounds used for silicone manufacturing, electrical wire insulation and kitchen utensil manufacturing.
It also reduces air pollution through car catalytic converters by converting more than 90% of harmful hydrocarbons and oxides of nitrogen into less toxic carbon dioxide, water vapor and nitrogen emissions.
It is one of the rarest precious metals and among its strongest. It resists tarnish and can be reshaped without losing strength or beauty; its white appearance rivals silver’s, making it suitable for jewelry purposes; wedding rings being its main market.
Platinum also serves as an effective catalyst and is now commonly found in automobile exhaust systems as auto catalysts to reduce pollution caused by internal combustion engines – this trend will likely only increase as emission regulations tightens further.
It is typically utilized for phosphorus chemical reactions and their applications in science. Its chemical properties make it an ideal catalyst, speeding reactions without changing or being consumed permanently in the process. Because phosphorus is also a key component of fuel cells which will power new-generation emission-free vehicles, platinum’s demand has grown exponentially over the past few years.