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Nowadays, you can trade practically anything you want, ranging from the stock market to cryptocurrencies. However, when it comes down to history, precious metals were always popular and highly sought after. The fact that you can trade metals is a huge advantage for many traders since some of them, especially precious ones, are much more stable than alternatives.
- You should consider precious metals as a way to diversify your portfolio and protect yourself
against the negative effects of inflation.
- Precious metals are commodities. Each one has its own unique opportunities and risks to
- Besides the possibility of physically owning the metals, you can also invest in mutual funds,
mining company stocks, and metal ETFs.
You can trade practically all precious metals but the main ones are the following.
The uniqueness of gold is unquestionable. Every single day, gold value is determined and gold trading largely revolves around the sentiment. When people want more gold, the price goes up.
Increased desire can be determined by different factors, including:
- Systemic financial concerns – Whenever money and banks are unstable or there is political instability, gold is seen as a very good store of value.
- Political crises or war – These events always make people want to buy gold.
- Inflation – Gold historically holds value so when inflation goes up, it is a safe haven for investors.
Silver is different than gold because its value is also highly influenced by how it is used at an industrial level. Price fluctuations are often more volatile than with gold. Silver does trade roughly the same as gold but when industrial demand and supply change, the price is affected.
When new innovations appear, silver prices change. This includes examples like:
- The predominant role of silver in different industries, like photography.
- When economies from the East grew because of the influence of the middle class, silver, and
many other industrial metals grew in value.
- Silver is used in microcircuits, superconductors, and batteries.
Platinum is always traded on the global commodities markets. Higher prices than with gold are fetched during regular market periods and when political stability is high. This is because of the rarity of the precious metal. Platinum price is determined by some unique factors, including:
- Industrial use – Most of the demand comes from the automobile market.
- Auto sales – When more vehicles are being sold, the platinum price goes up.
- Russia and Africa – This is where most of the platinum mines exist.
The top 3 precious metals mentioned above are very popular as commodities and are constantly traded all around the world. They are very important for the worldwide economy but you cannot simply just buy them and expect great things to happen. While historically speaking the value of these metals constantly went up, they also went down.
Before you invest anything in a precious metal like gold, silver, or platinum, learn all that you can about them. Analyze price performance and historical evolution trends. This helps you to make informed choices that increase your financial power.