Comparing All Precious Metals

If you’re looking to diversify your investment portfolio and hedge against inflation, you may be considering investing in precious metals. Before you choose which metals to invest in, it’s helpful to compare them to see their benefits and drawbacks. Noble Gold Investments, a precious metals investment firm, is here to explore and compare precious metals to give you investment insight.

Types of Precious Metals

Before you start investing in precious metals, you need to know what they are. A precious metal is rare and has a high economic value. The economic value of a precious metal can be expressed in many ways, such as industrial use, investor demand, hedge against inflation, etc. According to the U.S. Department of Energy (DOE), there are eight physical metals that are classified as precious metals. They include:

• Gold: This is the most popular precious metal and is a traditional store of value. It’s typically used to make jewelry, coins, and investment-grade bullion.
• Silver: This is another popular precious metal that is also a store of value. It has several common uses, including electronics, photography, jewelry, and more.
• Palladium: This is a rare metal that is valuable, especially for use in the automotive industry for catalytic converters. It’s also used for jewelry and electronics. 
• Platinum: This is a very valuable metal because it’s scarce. It’s used in many commercial and industrial applications, like catalytic converters in vehicles. 
• Rhodium: This is a rare metal in the platinum family that is often utilized for its reflective properties.
• Ruthenium: This is a long-lasting and corrosion-resistant metal, so it’s often used in industries that require these properties.
• Osmium: This is a rare metal that has a high density and melting point, allowing it to be used in spark plug contacts and alloys.
• Iridium: This is one of the rarest metals. It has a high-value density and is used as a byproduct of nickel refining and in alloys.

These precious metals are different from industrial metals like aluminum, steel, and copper, which don’t have very high market value and aren’t used as investment products.

Pros and Cons of Each Precious Metal

All precious metals have value, but which ones should you pursue? Comparing the pros and cons of the precious metals will help you determine which you should invest in. 

Gold

Gold is one of the most common precious metals to invest in, as it serves as a hedge against inflation and economic uncertainty. Some of the other pros of investing in gold include:

• Diversification of your portfolio: Purchasing gold bars or coins or opening a gold IRA can help you diversify your current investment portfolio. It can also add another layer of value to your holdings.
• Relative stability: Gold is relatively stable as an asset class, with demonstration of appreciation even during economic instability. 
• Versatility: Depending on the form of gold you invest in, you can either display gold coins, wear elegant jewelry, or simply keep bullion in a safe or repository.

Along with the pros of gold investment, there are a few cons to consider. Gold has a higher price than some other precious metals like silver and platinum. It can also be expensive to keep, especially if you store it in a secure repository. Physical gold also doesn’t generate interest like stocks and bonds do, which may be a drawback for some investors. It may also be more difficult to sell than other asset types if you adjust your investment strategy.

Silver

Silver is another popular precious metal for investing in, often alongside gold. It is another strong option for diversifying a portfolio, as it retains value over the long term. Some additional benefits of investing in silver include:

• Store of value: Silver is a physical asset that has a store of value that won’t depreciate like stocks, bonds, and other financial products. It’s also known as a safe-haven investment to hedge against high inflation.
• Affordability: Silver is typically more affordable to invest in than gold since it isn’t as scarce and has a lower price per ounce. This makes it accessible to more investors, especially beginners.
• Higher returns than gold: Silver generally has higher returns than gold despite its more affordable price, so investors can expect a larger percentage gain when silver prices start rising. 
• Versatility: Used in industries like electronics, jewelry, and automotives, silver is very versatile and can be utilized in several ways.

Although investing in silver has numerous benefits, there are some cons to consider. Silver is generally more volatile than gold because fear drives prices unpredictably and often negatively. Physical silver also has no dividends, so investing in other financial assets is often necessary to generate cash flow. Another potential drawback is that silver has no spot-on value or spot price per ounce, so investors can only sell their silver bars at the price someone is willing to pay at the current moment. 

Platinum and Palladium

Many precious metals investors focus on gold and silver, but platinum and palladium are other options that can be smart to add to your portfolio. Some of the benefits of these precious metals include:

• Intrinsic value: Platinum and palladium are extremely rare, so their scarcity makes them highly valuable. 
• Affordable alternative to gold: Palladium and platinum prices are more affordable compared to the price of gold, despite their high value. 
• Diversification: Purchasing platinum or palladium can help you diversify your portfolio while also making it more resistant to market fluctuations.
• Strong demand: Palladium and platinum are in high demand for the auto industry as they’re used to provide catalytic converters. This demand can offer unique growth opportunities and help them maintain their value.

Alongside the advantages of these precious metals, there are some disadvantages to take into account. Since platinum and palladium are very rare, there can be limited mining areas and supply constraints, which may impact their price and availability. They’re typically also more volatile with more price movements, making them a less attractive option for cautious investors. Platinum and palladium also have less liquidity and may be more difficult to sell at fair prices.

Rhodium

Rhodium is a rare precious metal that is known for its high reflectivity and corrosion resistance. It is not as common of an investment option as the above-mentioned precious metals, but it can be beneficial in some cases. Rhodium is very scarce as it’s produced as a byproduct of nickel and platinum mines, and production can’t be increased. This leads to a high demand in industries like automotive. One benefit of investing in rhodium is that it has the potential for sizable returns. However, the rhodium market is also very volatile, and the metal itself is not very liquid. These can be drawbacks for investors, especially those who are risk averse.

Ruthenium

Ruthenium is one of the rarest metals on Earth. It is used for its high resistance to corrosion and oxidation, particularly in industries like electronics and machinery. Its limited supply and distinct characteristics have made it highly valuable, making it a suitable option for investment for some investors. Ruthenium also has a proven record of providing notable returns over time, which is another benefit of investing in it. However, ruthenium is known for its price volatility and is not as stable as investing in a precious metal like gold.

Osmium

Osmium is a blue-gray metal that is highly dense, making it heavier than other precious metals. It is very rare and was only introduced into investing in the last decade. Since then, the osmium market has been quite profitable because of its potential yield. Osmium is also tangible, which can help provide protection for assets in the event of economic downturns that impact other intangible assets. However, since it is scarce and the investment process has only been developed in recent years, it is still quite volatile and not the most stable investment choice.

Iridium

Iridium is a very rare metal from the platinum metal group that is in industrial demand for sectors like aeronautics, automotives, solar energy, and more. The market for iridium is very concentrated in South Africa and Russia. The market is hard to penetrate, so it is not a common choice for investing. Iridium can be high value because of its rarity, but its price is very volatile. 

Which Precious Metals Should You Invest In?

Whether you’re a seasoned investor or are looking to get into the process, you may be curious about which of the precious metals is best to invest in. The answer is subjective, as every investor’s financial goals and risk tolerance are different. The current market conditions should also be considered.

However, if your goal is to diversify your portfolio with a precious metal that is relatively stable and acts as a hedge against inflation, gold and silver are safe bets for long-term investments. Adding smaller amounts of platinum and palladium to your portfolio can also be a good idea to further diversify, but their price fluctuations can be risky. If you’re looking for insight into investment basics or support throughout the process, turn to Noble Gold Investments. Our experienced investment team can help you answer questions like:

• What are the investment differences of platinum vs. palladium?
• Should I invest in silver bars or silver coins?

They can also compare gold prices with other precious metal prices to guide your investment decisions.

Trust Noble Gold Investments for Precious Metal Investing

Don’t wait to get started with precious metal investing—trust Noble Gold Investments, a provider of precious metal IRAs, including gold and silver IRAs. We have knowledgeable precious metal specialists who can talk you through investment in the precious metals market, establish your investment goals, and help you determine the best investments for your portfolio. To get started or learn more, contact us at Noble Gold Investments today.