Metals as Investments

Metals as Investments

Even though precious metals like silver and gold are used widely in jewellery, they make excellent investments. It is so because the value of these metals is ever-rising, and proper management of such assets can be very profitable. However, basic knowledge about the market and its functioning is required to do this. There are three categories based on how beneficial they are as investments. These are base metals, precious metals, and rare earth metals.

Let’s look at each of these categories in detail.

Base Metals

These metals are relatively abundant in nature and are prone to oxidation. There are many uses for these metals, from industrial to domestic. For example, the automobile industry is a major consumer of these metals. There are many ways to get in on this market and invest. One can make investments in companies that produce these metals directly. The other option is to invest in traded funds. In both options, the investment value is solely dependent on the demand for the metal.

Precious Metals

These metals are way rarer and harder to extract. They have high lustre and are soft compared to base metals. They are also ductile. All these beneficial qualities make these metals true to their name. Investment opportunities for these are also relatively abundant. Investors can buy metals like gold physically and trade them. People buy them in many forms like coins, bars, and ingots. These forms gain popularity, especially in times of economic crises. Other investment opportunities like stocks and mutual funds are also available. In the case of precious metals, it is wiser to opt for physical investments as other derivatives might not be profitable in the long run. They might depreciate even if the value of the metal increases.

Rare Earth Metals

Rare earth metals are elements like lanthanum, and their demand is skyrocketing. They are in great demand in the electronic industry. They are used in microchips and other such components and are crucial to technological advancements. They also have military applications. Even though rare earth metals are available in large quantities, processing them and getting them to a stage where it’s functional is quite expensive. It increases their value. Investors gain access through companies that specialise in the extraction of such metals.

Out of all these categories, precious metals are the most straightforward option as they require significantly less knowledge about the market. Their availability is also just at the right level, not as scarce as rare earth metals but not as abundant as base metals. Therefore, investing in suitable precious metal in the right way is the way to go. Here are the most popular precious metals and their trends.

  • Gold – Gold is an essential metal and has been influencing the economy throughout history. Even though it has few industrial applications due to its desirable qualities like malleability and conductivity, sentiment affects its price rather than demand. Its value is constantly updated 24 hours a day.
  • Silver – they determine the price of silver by two factors – Its value as an industrial metal and the part it plays as an item of value. It causes the price to vary more.
  • Platinum – Platinum is not extracted from the ground as much. So are some other precious metals. They merely trade around. Platinum is scarce and has a reasonably stable price.

 While there are many opportunities for investors at all levels to make profits, one should note that it is equally easy to lose their money by not making the proper investment or by mismanagement. Therefore, one should consider all available options carefully, and one should make an informed decision.


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