There are four precious metals that are most commonly used in stock trading for investment: Gold, Silver, Palladium and Platinum. Let’s look together at the specifics, advantages and disadvantages of investing in each instrument.
Investing in gold
Gold is the most popular precious metal for investment. Gold has traditionally been considered an important crisis and protection tool when equity and bond markets fall. Gold also serves as a protection against inflation. Gold investment is called a safe investment.
Advantages of gold investment
High reliability
Gold is exempt from sales tax in Germany when purchased
High liquidity and market capacity
Gold is not tied to a place and is “mobile”
Resistance to inflation
Gold can never become worthless and has maintained its purchasing power for over thousands of years
Easy transport in case of emergency
Gold is a universal currency that can be bought and sold in any country
No close connection to economic activity
Gold can be purchased and stored partially anonymously. (in Germany, the purchase of gold is possible anonymously up to an upper limit of 1,999.99 euros)
The price is almost independent of the production level and demand.
Disadvantages of gold investment
Gold is expensive (price for one ounce – 1,723.89EUR, as of the beginning of September 2022)
Significant growth to be seen only after a few years
Decline in the phase of stock market growth
Gold bars and gold coins are not infrequently counterfeited (that is why we recommend buying gold exclusively from reputable dealers in precious metals)
Narrow range of uses (as global central bank reserves and in the jewelry industry/industry).
Storing gold bars or gold coins at home is unsafe unless you have a safe and insured vault
Invest in silver
Silver is a precious metal and, like gold, has long been considered a reliable security, but its low cost makes it much easier for the small investor to acquire. However, silver prices are often more volatile than gold prices. In addition, silver is actively used in innovative industries such as solar cells and silver-zinc batteries.
Advantages of silver purchase
Low price and associated accessibility for the mass investor
Low entry threshold
Used in industry, such as: automobiles, medical cutlery, smart phones, solar panels, etc.
Disadvantages of silver purchase
Storage and weight – where do you put the silver bars and/or silver coins and how do you transport them in case of emergency?
Correlation with the dynamics of the gold price
When storing in a safe deposit box, there are fees that are relatively high for the value of the silver
When buying in Germany currently 7% VAT due
Silver is subject to high price fluctuations
Not very high liquidity and market capacity
Decline during the growth of the stock market
Investing in platinum
Platinum is a metal for the jewelry industry that can serve as a protective shield if the value of gold and palladium should fall. Platinum is used in the production of electronics and catalytic converter parts in the automotive industry, which clean exhaust gases. Among the most famous platinum coins are the Australian Koala, platinum the Maple Leaf from Canada, platinum Panda from China, platinum Eagle from the USA. Also SA-Mint (South African Mint) minted a Krugerrand platinum coin in 2017 mintage is at only 2017 copies). It is the only platinum Krugerrand coin so far. It was issued on the occasion of the 50th anniversary of the famous Krugerrand gold in the highest minting quality Proof/PP = Polished Plate.
Advantages of platinum purchase
Platinum is used in the industry
Storage possible in the most compact space possible
High liquidity
Platinum is corrosion resistant and can not rust
Is a hedge against declines in gold and palladium
Low volatility
Disadvantages of buying platinum
Unlike the purchase of gold, the purchase of platinum in Germany is subject to the statutory VAT of 19%.
Lower demand
High entry threshold
Stagnation of values in recent years
Invest in palladium
Palladium is seen as an interesting alternative or supplement to gold, silver and platinum as a value investment among experts. Palladium is a pure industrial metal. It is one of the rarest precious metals: its reserves are 15 times smaller than those of platinum and 30 times smaller than those of gold. More than half of the palladium produced is used in the automotive industry. It is the most volatile of all precious metals. Its quotations are very sensitive to the state of the world economy, but this brings additional risks for the money investor. Because the overwhelming majority of palladium production goes to industry, this means that only a very small percentage is purchased by money investors or by jewelry consumers.
Cheaper than palladium bars is the purchase of palladium coins. In 1987, Portugal, France and the Bermuda Islands minted their first palladium coin, followed by Switzerland and Samoa. In 2005, Canada minted the well-known Maple Leaf coin for the first time in palladium as well as silver and gold.
Advantages of buying palladium
Inflation hedge
Palladium is commonly used in industry
Palladium is obtained as a by-product of platinum or nickel mining
The value is subject to strong fluctuations and can achieve quick profits in the short term
Disadvantages of buying palladium
Palladium is dependent on global economic and industry conditions
High volatility
Higher risk of loss due to strong price fluctuations
Palladium is not VAT free
When and how to invest in precious metals
Precious metals, and gold in particular, have historically helped protect investment portfolios during times of financial, economic or political turmoil. There are several ways to buy precious metals: Coins, bullion, mutual funds, exchange-traded futures, etc. All options have advantages and disadvantages. We will be happy to advise you.
As a rule, demand for precious metals increases when there is more unrest in the world, which can be related to both financial instability and geopolitical tensions.
The best time to invest in precious metals may have been 20 years ago, the second best is NOW!
You may also be interested in:
https://rarecoin.store/blog/prepper-stets-gewappnet-fuer-die-naechste-katastrophe/
Simple rules for investing in precious metals
Now that we have already found out what are the advantages and disadvantages of buying precious metals and why to choose them, you may wonder what other tips are important. Let’s look at 3 rules for investing in precious metals, how to invest in precious metals and stay profitable.
1 Invest in precious metals for the long term and be patient – don’t expect quick gains after a few weeks or months, as the cost of precious metals rises very slowly. But in 10-15 years, such investments can outpace inflation.
2 Analyze market conditions before making a purchase. Thus, normally, the value of gold increases during a crisis, and when the economy stabilizes, prices fall again. So you should not panic and rush to buy or sell.
3 Do not put all the eggs in one basket. Diversify your portfolio and limit investments in precious metals to a maximum of 10%. Even if you choose a safe metal like gold.
Are you interested in buying or selling gold, silver, platinum or palladium coins? You can find what you are looking for at a precious metal or coin dealer in your area. It can be even more convenient to order from a reputable precious metal dealer’s online store. We at RareCoin also have a large selection of interesting rare coins and look forward to hearing from you.
Discover the new additions to our gold coin collection in the current range!
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Rwanda – 1965 – 100 Francs President Gregoire Kayibanda – 30g – NGC PF68 CAM
2.650,00 €plus shippingDelivery Time: approx. 2-3 days (excluding Saturdays, Sundays and public holidays) -
Chile – 100 Pesos – ND (1932-1980)-SO – Pattern – 18.3g Gold – Trial Planchet – PCGS MS62
1.700,00 €plus shippingDelivery Time: approx. 2-3 days (excluding Saturdays, Sundays and public holidays) -
South Africa – 2020 – Rhino – Big Five Series I – 1 oz Gold Proof
4.500,00 €plus shippingDelivery Time: approx. 2-3 days (excluding Saturdays, Sundays and public holidays)