Why Investing in Precious Metals is a Smart Play

The state of the wider world is, as few other times in history, an ever-shifting, vastly mercurial place. The owner of a mansion today may find himself or herself begging on the street the next while the beggar of yesterday may, with the newly-risen sun, count himself among the nouveau-riche. Such turbulent economic and social environs are normally thought of as the sole province of the third world, a consequence, perhaps, of their presumably backward way of doing things. However, a simple glance at the evening news will bear out the falsity in this line of thinking – the so-called “first world”, the nations, like America, the UK, and others who sit at the top of the heap, as it were, are learning that they too are susceptible to the vagaries of chance.

Some particularly intrepid people may find this sort of climate a boon, an excuse to indulge in the whispered suggestions of an adventurous spirit, but for most, and particularly for the private and/or business investors of the world, the volatility currently gripping the world markets is, more than anything else, a source of trepidation. Wealth, unless a person wins the lottery or strikes oil, is most definitely not an overnight phenomenon, and once obtained, it is only natural that he or she who worked for it would want to protect it. Wealth accumulation is hard work, and some might say that the real sweating begins only after it has been secured! The good news, though, is that it needn’t be that way.

There are many investment vehicles one might choose to employ in an effort to provide him or herself with a measure of long-term security. Some more contemporary examples include government bonds, real estate, certificates of deposit and other banking instruments, and large amounts of varying fiat currencies. However, the old adage about tradition rings just as true in the case of investment as it does in other areas of life. Sometimes, the old ways are the best ways, and when it comes to investment, it doesn’t get much more traditional than precious metals, and with good reason. As any student of history will tell you, gold has been synonymous with affluence since time immemorial, and now investment in precious metals, like bell bottoms, canning food, and typewriters, is coming back into fashion. It seems everything old is new again, and for the investor with the right knowledge, that spells very good news indeed.

Precious metals, quite simply, are secure. Reach into your wallet and feel a dollar note. It’s paper, and whether you know it or not, the vast majority of it is backed by nothing more than a government’s good word. Precious metals, by contrast, have had and held inherent value to human kind since they were first dug out of the dirt. Whether it’s their ability to be worked into everything from jewelry to great monuments of state, their universality as a medium of currency, or even just because they’re shiny, precious metals have, as some pundits and experts have put it, never been worthless. In other words, and much like land and other tangible assets, precious metals are so precious because they’re a safe bet on long-term wealth.
bullion bars
Most people think only of gold when you speak about metal as money, but there are actually a few types of precious metals one might use as currency, including, of course, gold, but also platinum, silver, and palladium. Read on to learn more about each of them.

GOLD : No article of this sort would be complete without the mention of gold as an investment vehicle. Perhaps the oldest and best-loved currency on the planet, gold is firmly entrenched in the human psyche as a sign of wealth and power, and it’s usually what people think of when one speaks about this topic. That’s not all it’s good for, though. The electronics industry uses it as a conductor, and other industries utilize it for its heat-resistant properties, corrosion resistance, and malleability.

SILVER : The next most well-known and well-used precious metal in terms of currency is silver. This is likely due to its closeness to the former in terms of available uses. Traditionally, silver has been used as currency, jewelry, plating (as in ceremonial armor and so on), and basically anything one can do with gold, but usually only when gold isn’t readily available. Modern uses include use in some electronics, decorative accents, jewelry, and so on.

PLATINUM : In terms of wealth, platinum is perhaps less well-known than its cousins. Though it can certainly be used as money, it usually isn’t. This is probably a result of the fact that platinum has traditionally been viewed as a step above gold, not necessarily in terms of its value as an everyday currency – gold and silver being the workhorses in that regard – but rather in terms of its comparative rarity. Supply and demand have ensured that platinum usually serves as an ostentatious show of one’s very high degree of monetary riches. Contemporarily speaking, platinum’s main value is found in its use as a component in computers, medical equipment, and even automobiles.

PALLADIUM : This metal is almost certainly the least well-known on this list, and hence the precious metal least dealt in. In fact, while it is definitely an effective means of storing value, its worth lies not in its use as an instrument of currency, but in more modern applications. Palladium, due to its workability, serves a wide range of industrial needs, often finding it serving as a stand-in for gold in electronics by dint of its high conductivity. Being also a great heat resistor and slow to oxidize, palladium is often used in heat-sensitive auto parts. Other uses for palladium include its use in the manufacture of fuel cells, the processing of photos, water purification, and the processing and refinement of various raw materials, including oil, gasoline, and similar products.

The prices of precious metals on the open market are, like other commodities, almost always in flux. Past years have seen soaring values, with gold and platinum sometimes rising above $2,000 U.S. dollars an ounce. While those days are gone (at least for now), here are the current spot prices of the precious metals discussed so far as of 1 February
2013 (all prices quoted in USD):

  • GOLD: $1668.60
  • SILVER: $31.94
  • PLATINUM: $1687.00
  • PALLADIUM: $761.00

The bid/ask spread for these commodities is rarely more than a few dollars, with the exception of palladium, whose current spread is +/- $30 USD. Historically, precious metals prices, even in times of great turbulence like war or famine, have remained stable. Of course, with great demand comes a jump in cost, but even then the high prices don’t jump around. You can, in other words, go in knowing what you can expect to pay.

As for the metals themselves, when it finally does come time to buy, investors have a broad range of choices including coins, bars, bullion, and other related products. Stocks are another option, most often furnished by mining companies. Cash, of course, is also accepted as a means of purchase, at least in the vast majority of instances.

As for the future of precious metals, no human being can predict the future with 100% surety, but if the track record of human civilization is any indication, the precious metals discussed in this article can be expected to hold their value for years and years to come.

While one can be relatively more confident when investing in precious metals as a means of hedging and preserving value, use as currency, and so forth, that by no means implies that a person ought to go in unprepared or full of hubris. Real money is at stake, and those stakes are at times very high. Quite frankly, if you play this game poorly, you can lose your shirt. On the other hand, smart investors with well-laid plans and good advisors can rest easy knowing that their portfolio is based on a solid foundation. The obvious question, then, is who to talk to. Who can an investor trust to give him or her the knowledge, help, and insight that they need to be successful?


In addition to giving an investor all the information and advice needed to conduct intelligent business, professional merchants offers other services related to precious metals investing. These include the secure, hassle-free storage of one’s precious metal investments, the facilitating of trades with other investors, various accounts for those interested in long=term financing or the aforementioned trading of commodities. Live help in the form of customer support is, of course, always at a customer’s disposal.

In short, Monex.com makes precious metals investing a hands and hassle free endeavor. To learn more about this exciting opportunity or to begin your investment journey, follow the link given above.


Why Investing in Precious Metals is a Smart Play
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