Why Collect Precious Metals?
Precious metals are shiny and valuable. They’re beautiful and enduring, and can be used in fine jewelry, as well as other metalworks. Gold and silver jewelry has been popular for most of history, due to its pretty and delicate appearance, representing wealth for whoever owns it. In modern times, precious metal jewelry is used for engagements and weddings, to represent lifelong commitments between partners and treasure that lasts.
Whether you’re interested in jewelry, or coin collecting, or other forms of precious metals, they will last and keep their value for a while. As discussed by the National Library of Medicine in this article on gold’s use in the economy, gold coins have been in use since 550 bce: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5626194/
What Makes Metals Valuable?
Precious metals are considered valuable because of rarity. Silver, gold, and other rare metals have to be mined and processed, and create greater demand than other more common types of metals. Their delicate nature makes them suitable for jewelry and small mechanisms rather than large machinery, furniture, or construction. These metals can be costly, but are made available for many consumers due to the demand. Their association with wealth and opulence adds to their value.
Upsides to Investing
There are many ways to invest nowadays – stocks, property, crypto – but what can you rely on? New currency fads may promise to make millions, but the public confidence in crypto is failing already, and the stock market isn’t always the best playing field either, with frequent dips and crashes causing the stocks’ value to plummet. So what about precious metals? They have a long history of investment, and they’re a physical form of wealth that you can hold and keep. There’s plenty to consider about investing in precious metals.
Precious metals are an enduring form of investment – gold has been a popular currency since it came into common knowledge. It has a history that outlasts newer forms of investment.
As explained here, they also aren’t susceptible to hacking and digital theft. They are overall much simpler to invest in than things like stocks, bonds, and cryptocurrency. Metals don’t require much understanding of the stock market or online economics – just the purchase and care of your silver or gold.
For this reason, people are more likely to trust things like gold and silver than currencies that are subject to inflation, stocks that depend on the health of the economy, and other less tangible forms of wealth. Metals are more durable than paper money and can be kept in multiple forms, including coins, jewelry, and solid pieces.
Precious metals can be sold for whatever mainstream currency you need, making them ubiquitously useful. Furthermore, these are not subject to inflation in the way mainstream currencies will be. The U.S dollar lowers in value each year, but gold tends to rise in value, and precious metals have a more stable baseline of worth.
Furthermore, if you do like to invest in multiple ventures, having some precious metals helps you have some variety in your sources of wealth. If one venture doesn’t pan out, you have something to fall back on, and precious metals are a safer bet. These are all reasons why someone might find precious metals a good choice.
Downsides and how to Mitigate them
No matter how shiny and nice silver and gold may be, precious metals cannot be perfect. However, the disadvantages can be mitigated, and these metals still have many advantages over other forms of investment.
The first barrier to investing in precious metals is the cost. Gold in particular becomes more and more expensive to purchase – this is good if you already own gold, but if you’re looking to purchase for the first time, this can be difficult.
Another downside is that metals do not produce money while you’re holding them. Stocks can earn passive income, and savings earn interest, but metals will not make any additional money until they’re sold. However, this is true of a lot of capital a person has: generally speaking, if you own a house or a car, you are not making extra passive income off of them. These forms of wealth are still worth something, however, and as long as you diversify your assets you can be making income from other investments and also have your metals.
Finally, there is the fact that values of metals such as gold and silver may fluctuate, giving them inconsistent values. Fluctuation is natural in any market, and will sometimes correct on its own. However, there’s also specific steps you can take to mitigate this risk. Precious metal investment websites such as Lexi capital review tend to have information on the pros and cons of investing and how to minimize risk.
What Metals to Choose?
The primary precious metals that most people buy tend to be gold and silver. Both are popular and have been for millennia, and both have a lot of value. However, gold is more expensive than silver, and they each have different advantages.
Silver is more affordable than gold, and so has a lower barrier for entry. Silver also has more industrial and commercial uses than gold. This can cause its value to fluctuate more, as demand for silver will sometimes be higher. Silver also takes more room to store than the same amount of value in gold, as with silver you will be getting more for your price.
Gold is considered to have greater intrinsic value, and may be seen as the better investment in the long run. It is easy to liquidate, but may have higher fees.
There are several other metals considered precious that one could invest in, but gold and silver are by far the most popular and easy to invest in, and make a good starting point.
Owning precious metals can have many benefits, from personal to economical. There are several considerations, but ultimately the values of precious metals can’t be denied.