What are Precious Metals? Which Precious Metals Can be Invested in?

What are Precious Metals? 

Precious metals are a type of metallic chemical elements that occur naturally but are scarce in the earth's crust. They are expensive, beautiful in appearance, and chemically stable. They have high economic value and strong ability to maintain value. The most famous of precious metals are gold and silver, which have played an important role in art, jewelry and coinage since ancient times, and now also have important and widespread applications in industry. In addition to gold and silver, precious metals generally include six platinum group metals: ruthenium, rhodium, palladium, osmium, iridium and platinum, of which platinum is the largest traded, second only to gold and silver. However, because the other four platinum group metals except platinum and palladium are not internationally recognized as futures, options and ETF trading objects, other platinum group metals are sometimes called noble metals instead of precious metals, but they are all translated as precious metals in Chinese.

Which Precious Metals Can be Invested in?

There are many ways to invest in precious metals, such as directly purchasing physical or securitized products (such as ETFs or options), or participating in market transactions by opening an account or trust fund. Investors can choose a suitable investment method based on their risk appetite, income goals and capital size. The advantages of investing in precious metals are that you can diversify the risks of your investment portfolio, improve your ability to resist inflation, and enjoy the benefits brought by rising prices of precious metals. The disadvantages of investing in precious metals are storage and insurance fees and the risk of market volatility and illiquidity.

Here are some common precious metals you can invest in and their characteristics:

Gold

Gold is one of the most popular precious metals, with a high degree of value retention and liquidity, and is widely used in jewelry, industry, and currency. The price of gold is affected by factors such as the global political and economic environment, the U.S. dollar exchange rate, supply and demand, market sentiment and other factors. Investors can invest in gold by purchasing gold bars, gold coins, gold jewelry or related securities products.

Silver

Silver is another popular precious metal that is highly conductive and reflective and is widely used in jewelry, industry, photography, and medical applications. The price of silver is affected by factors such as industrial demand, mineral supply, speculation, and the gold-silver ratio. Investors can invest in silver by purchasing silver bars, silver coins, silver jewelry or related securities products.

Platinum

Platinum is a rare and expensive precious metal that is highly resistant to corrosion and catalytic and is widely used in automobiles, jewelry, petroleum and chemicals. The price of platinum is affected by factors such as automotive demand, mineral supply, and geopolitical factors. Investors can invest in platinum by purchasing platinum bars, platinum coins or related securities products.

Palladium

Palladium is a precious metal similar to platinum that is also highly corrosion-resistant and catalytic and is widely used in automotive, electronics and dentistry. The price of palladium is affected by factors such as automotive demand, mineral supply, alternative materials, and more. Investors can invest in palladium by purchasing palladium bars, palladium coins or related securities products.