Precious Metal

Investing in Precious Metal

Gold and silver have been recognized as valuable metals and were highly coveted by ancient civilizations. Precious metals still have their place in a savvy investor's portfolio in modern times. But which precious metal is best for investment purposes? And more importantly, why are they so volatile? There are many ways to buy precious metals like gold, silver, platinum, and a host of good reasons why you should give in to the treasure hunt. So if you're just getting started out in precious metals. They were historically used as the basis for money, but today are traded mainly as a portfolio diversifier and hedge against inflation.

Filling up your Treasure Chest

Let's take a look at the options available to invest in precious metals with Gateway FX;

GOLD

Gold is unique for its durability (it doesn't rust or corrode), malleability, and ability to conduct both heat and electricity. It has some industrial applications in dentistry and electronics, but we know it principally as a base for jewelry and as a form of currency. Its value is determined by the market 24 hours a day, seven days a week. Gold trades predominantly as a function of sentiment—its price is less affected by the laws of supply and demand. This is because the new mine supply is vastly outweighed by the sheer size of above-ground, hoarded gold. To put it simply, when hoarders feel like selling, the price drops. When they want to buy, a new supply is quickly absorbed and gold prices are driven higher. It has served as a hedge against inflation and the erosion of major currencies, and thus is an investment well worth considering.

Min Deposit: $25,000
ROI: 5-10%

SILVER

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 this market are more volatile than in the market for gold. While silver roughly trades in line with gold as an item to be hoarded, the industrial supply/demand equation for the metal exerts an equally strong influence on its price. That equation has always fluctuated with new innovations, including Silver's once predominant role in the photography industry (silver-based photographic film) has been eclipsed by the advent of the digital camera. The use of silver in batteries, superconductor applications, and microcircuit markets. It's unclear whether, or to what extent, these developments will affect overall non-investment demand for silver. One fact remains: Silver's price is affected by its applications and is not just used in the fashion world or as a store of value.

Min Deposit: $25,000
ROI: 3-6% (Depending on Market Volatility)

PLATINUM

Like gold and silver, platinum trades 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. Like silver, platinum is considered an industrial metal. The greatest demand for platinum comes from automotive catalysts, which are used to reduce the harmfulness of emissions. After this, jewelry accounts for the majority of demand. Petroleum and chemical refining catalysts and the computer industry use up the rest.

Min Deposit: $30,000
ROI: 6-12%

PALLADIUM

Lesser known than the three metals mentioned above is palladium, which has more industrial uses. Palladium is a shiny, silvery metal used in many types of manufacturing processes, particularly for electronics and industrial products. It can also be used in dentistry, medicine, chemical applications, jewelry, and groundwater treatment. Metalworkers can create thin sheets of palladium down to one-two hundred fifty thousandths of an inch. Pure palladium is malleable, but it becomes stronger and harder once someone works with the metal at room temperature. The sheets are then used in applications like solar energy and fuel cells. The largest industrial use for palladium is in catalytic converters because the metal serves as a great catalyst that speeds up chemical reactions. This shiny metal is 12.6% harder than platinum, making the element also more durable than platinum. In 2021, South Africa was the largest producer of palladium followed by Russia.

Min Deposit: $60,000
ROI: 10-20%

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