A Way To Profit From Precious Metals
Thanks to Jack London’s adventure novels, the phrase ” gold rush” is still shrouded in an aura of adventurism. In the past, precious metals and stones were considered the most reliable option for preserving capital, and finding them is an excellent way to increase it.
Today, few people dare to give up their usual life and go to the mines of the American Klondike River, to Siberia, or Kamchatka. But there are other ways to make money on gold and other precious metals. In addition to traditional silver, these also include platinum and palladium. of these metals has its own area of application. Gold is undoubtedly the most important from the point of view of economics and finance. It forms the basis of the state gold and foreign exchange reserves of most countries. Until recently, all world currencies were valued relative to the value of gold, but in 1971, the US government canceled the dollar’s peg to the “despicable metal”. This led to the destabilization of the exchange rates of all currencies, but it provoked explosive economic growth in many countries. It is no secret that gold and silver are at the heart of jewelry art. But platinum, despite its strength and mesmerizing brilliance, is not so common in jewelry, since it makes them much more expensive. An ignorant person is unlikely to notice the difference between two identical rings if one of them is melted from platinum and the other from white gold. Moreover, the latter will cost one and a half to two times cheaper. If you are interested come and visit this truck accident lawyer from Los Angeles.
When to buy precious metals
Great, so precious metals are in demand, and, therefore, are high in price? Unfortunately, not everything is so simple. In recent decades, their value graphs have shown large fluctuations. It depends on both demand and general market conditions.
Gold and silver
Noble metals are traditionally considered to be protective assets. That is, the main purpose of investing money is not to increase capital, but to preserve it. After the abolition of the ” gold standard “, most of the economic crises were accompanied by a rise in the price of gold. The logic is obvious – the value of a gold piece or ingot is contained in it. Human psychology also plays a significant role. From time immemorial, people believe in a special, one might even say the mystical value of the yellow metal
Platinum and palladium
The price of palladium and, to a lesser extent, platinum is influenced primarily by industrial demand. This means that their price depends on the demand for products and equipment made from them in the world market. If you look at the graphs of price changes for these metals over the past decade, you can see that palladium has a pronounced upward trend. Platinum, on the other hand, is steadily falling in price. In 2011, she lost the championship to gold for the first time in history. For several more years, metals competed among themselves on this indicator, and then platinum lagged behind.
This appears to be the most practical solution at first glance. However, when it comes to investing money, it could be the worst. You will pay 2-3 times the cost of the used metal for any piece of jewelry, and it will be valued at this amount in a pawnshop if you suddenly want to sell or mortgage it.
investment in gold
Gold costs 2-3 times more expensive than the metal from which it is made, therefore it is not suitable for capital accumulation
Is it worth investing in precious metals?
In any case, the choice is yours. It’s important to remember that precious metals are primarily a protective asset, so you’re unlikely to make a lot of money with them. Expert investors advise against investing more than 10% of your savings in them. Investments in precious metals can reduce the cost of capital over the medium term (up to 1-2 years), according to experience. At the same time, it is self-evident that gold’s price always rises over time (3-10 years). Other precious metals, such as silver, platinum, and palladium, follow the same rule, but the period may be longer, so be cautious.