An Overview Of Investments In Precious Metals

Precious metals have been the premier fall back investment in times of uncertainty. Throughout the saga of mankind, precious metals have been held and hoarded for their perceived value. The purchase of precious metals is considered the classic hedge against any number of financial and societal disasters. From the Roman Empire, to the Romanovs, all the way to today, gold coins have been ultimate form of emergency supply. Somewhere in the world right now, a soon to be refugee is sewing gold or silver coins into the hem of a skirt, or the lining of a coat, in anticipation of exile or escape. Now more than ever investing in precious metals makes sense. Which precious metals are available for investment and in what form are they available are questions that need to be explored. http://www.monex.com/widgets/PA_LINE_45DAY_CUSTOM_WIDGET.PNG

The price of gold is featured in the media daily, but is this the only precious metal around? When the term ‘precious metal’ is used it conventionally refers to four metals, gold, silver, platinum and palladium. Of the four, gold is the most widely know and traded commodity. While the price of gold may be spoken about most often, the other metals, silver, platinum and palladium are actively traded. For the purposes of this overview, precious metals will refer specifically to those four.

Precious metals are used in making currency in the form of coins and to make jewelry. All of the four have electrical and industrial uses, in addition to their use in jewelry and currency. Precious metals are actively traded in the form of physical bullion and ingots, coins, futures contracts, stocks and exchange traded funds (EFTs). The major markets they are traded on are in Zurich, London, New York, Chicago, and Hong Kong. It is relatively easy to buy precious metals in various forms and amounts. How much you buy, and how your treat those purchases relates to your investment strategies and your budget. The active trading of the various precious metals takes place around the world. Precious metals are traded 24 hours a day. From the London Fix, to COMEX and GLOBEX in the US, to the Chinese Gold and Silver Exchange Society in Hong Kong, to the Bank Settlement in Zurich, Switzerland; the price of gold is active and trading.

Is this schedule so important? The answer to this question is emphatically yes! A significant aspect of any investment is liquidity. The availability of active markets is of paramount importance to the value of any commodity. Ease of trading is a factor to consider when buying any investment. A thinly traded market is a more volatile market. There is less volume to absorb price movement in the thinly traded market, which leads to wilder price fluctuations. The price of precious metals fluctuates in relation to several factors. These factors influence the value of the specific metals in varying degrees. All factors must be considered when investing. The price of precious metals may move in somewhat the same direction, but each individual metal has its own fundamentals.

The question here what is the best form of precious metals investment? One way to get into gold investment is with gold stocks, mutual funds and EFTs. These may be an easy addition to an IRA account or other retirement plans. These are perfectly respectable investment vehicles related to gold and other precious metals. Investing in stocks or funds may seem like it should be easier, perhaps even safer than outright metal purchase. This can be tricky because there are a whole new set of fundamentals that can influence the performance of the stock or fund. Now the actual management of the fund or of the company and a whole gamut of influences, in addition to the market value of your precious metal, can determine the value of your gold holding.

The most expensive and volatile markets are the commodity futures markets. This is the place for speculating, buying or selling with the goal of making a profit in the price fluctuations and doing it quickly. Trading in these markets should only be attempted when one has expertise and lots of spare capital to lose. For practicality and expense, the trading of futures contracts is out. The futures market is not suited to most investors, but there is no reason that the average investor shouldn’t invest in precious metals, in fact, most financial planners recommend that gold be a part of everyone’s saving and retirement portfolio.

This point here seems to be that the most obvious way to own and trade precious metals is to, well, buy the actual metal. Gold, silver, platinum and palladium are all available in four classic forms. Those forms are bullion or ingot, which refers to a formed bar of a specific metal. Bars are made in standardized sizes and guaranteed as to purity and weight. Ingot or Bullion Coins, these coins are minted specifically for their pure metal content and traded as such. Gold ingot coins include; gold and silver Vienna Philharmonics, gold American Buffalo, gold, silver & platinum American Eagles, gold, silver, platinum & palladium Canadian Maple Leafs, and gold South African Kruger ands.

When buying bullion, ingots or coins, it is important to know that there are more decisions to be made. One can take physical delivery of the metals or have them held in storage. If they are held in storage, there may be storage fees involved. In the case of bullion, if held at home or in storage, assay fees may be a part of selling the metal. It can’t be said which option or which precious metal is best. That decision must be made on a case-by-case determination. What can be said is do the research and be sure to use a trusted industry company to buy any precious metals. Don’t go to the corner coin shop or some gold dealer touted on TV. Go to Monex.com. Monex us the largest precious metals market maker in the United States. The dependable place to go for advice and for purchasing all forms of precious metals.

Who can say what the future holds for the precious metals market? One thing is certain, uncertainly! We live in a volatile world. Historically, gold has been used as a hedge against inflation, and yet at a time when interest rates have been low, the price of gold has been sky high. Conventional wisdom does not seem to work so well these days. Political instability and burgeoning budget deficits are only two of the fundamentals that are affecting precious metal prices. Gold prices may have fallen off of their historical highs, but who can say they will not just solidify and reach for higher historical highs?

References:
http://www.investopedia.com
http://www.monex.com/
http://goldnews.bullionvault.com/US_Debt_Gold_Price_061420115
http://www.tradertech.com/trading/palladium

An Overview Of Investments In Precious Metals
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