That said, during times of economic uncertainty, sellers benefit, as prices tend to shoot up. Precious metals provide a useful and effective means of diversifying a portfolio. The trick to achieving success with them is to know your goals and risk profile before jumping in. The volatility of precious metals can be harnessed to accumulate wealth. Left unchecked, it can also lead to ruin. World Gold Council. Federal Trade Commission.
Federal Reserve Bank of St. TD Ameritrade. Geological Survey. Accessed May 7, Metals Trading. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification.
I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Table of Contents Expand. Filling Up Your Treasure Chest. Will Precious Metals Shine? Precious Metals Risks. The Bottom Line. Key Takeaways Precious metals are thought to be a good portfolio diversifier and hedge against inflation - but gold, perhaps the most well-known such metal, is not the only one out there for investors.
Silver, platinum, and palladium are all commodities that can be added to your precious metals portfolio, and each has its own unique risks and opportunities. In addition to owning physical metal, investors can gain access through the derivatives market, metal ETFs and mutual funds, and mining company stocks. The exchange publishes comprehensive market data, news and educational materials, and stock reports on base metals markets. The CME publishes daily volume and open interest reports for precious and base metals commodities, educational courses on metals trading, trading tools, brokerage resources, and other information about metals markets and trading.
To explore other commodity categories, see our guides on agricultural and energy commodities. Skip to content. Disclosure: Your support helps keep Commodity. Learn more Contents Why Are Metals Important? Commodity Primary Uses Contract Size Futures Exchange Aluminum Aerospace, cans, automobiles, construction, electrical wiring, appliances, foil and packaging. The metal is also used in the production of petroleum, electronics, fertilizers and lubricants. Other uses include electronics, plating, catalysts and rechargeable batteries.
Chemetall Foote Lithium Operation. Loading table Aerospace, cans, automobiles, construction, electrical wiring, appliances, foil and packaging. Electrical wiring, plumbing fixtures, transportation equipment, electric equipment, electronics, consumer products and industrial equipment.
Iron Ore. Molybdenum is primarily an alloying agent with steel. Most nickel is used in stainless steel manufacturing. Construction and infrastructure projects, mechanical equipment and automobiles.
Zinc is principally used to galvanize steel and as an alloy to strengthen other metals. Examples include copper, lead, nickel and zinc. These metals are used to make products such as copper pipes, or to make alloys such as nichrome — which is an alloy of nickel and chromium. Copper is also a popular sculpture material, with icons including the Statue of Liberty getting its green hue from oxidised copper.
There are generally taken to be four main precious metals to trade: gold, silver, platinum and palladium. These all have a range of applications, not just as a historical store of money or for their use in jewellery, but also in industry, electronics, medicines and as alloys.
Gold has been used in the production of expensive goods for millennia. Today gold is used in jewellery, decoration and — thanks to its conductivity — the smartphones and computers that we all use daily. These give silver a range of applications, including in batteries, dentistry and water purification. Platinum in its pure form is used in jewellery and dental work. Palladium is a congener with platinum — meaning the two metals share a common structure, origin or function. When you trade with us, you can choose whether you want to trade precious metal futures, spot prices and options.
Stocks let you gain indirect exposure to precious metals by buying shares in the companies involved in their production and use. ETFs let you speculate on a diverse collection of assets in a single investment, and commodity ETFs — such as a gold ETF — will be set up to closely follow the price of that metal in the underlying market. As with any product or service, a shortage of precious metals — or an increased need for them — makes them more valuable.
For example, if a strike at a major silver mine interrupts production, silver prices could increase over the short term. An improvement in mining equipment could have the opposite effect, speeding up production and saturating the market — which would drive prices down, assuming demand remains constant.
In times of economic and political instability, precious metals are traditionally viewed as safe havens due to their lasting value. Precious metals have a huge range of industrial uses, including in the manufacture of automotive parts, medical devices, electronics and jewellery.
As demand for these goods grows, so does the demand for precious metals. Given that precious metals are dollar-denominated, they are particularly susceptible to fluctuations in the value of the greenback. When the dollar falls, precious metals are a good place to store USD — meaning it is likely to push the price of precious metals higher. Precious metals offer a desirable alternative for fixed-income investors, whose investments offer a lower yield when rates are slashed.
Of more importance is how rate announcements affect the dollar. Precious metals generally perform better in a rising-inflation environment. This is because quantitative easing — or money-printing — dilutes the value of the currency in circulation, and makes it more expensive to buy assets which are viewed as a reliable store of value.
Precious metals are regarded by many investors as a good investment — particularly gold, which is known for its safe-haven status. Investors will often move their money into gold during times of market uncertainty and because of their applications in jewellery, electrical components, car parts and industry, precious metals are usually in high demand.
Alternatively, you can invest directly in the shares of companies that produce precious metals with a share dealing account. These properties lend silver to a wide spectrum of uses. Platinum and palladium are the lesser known precious metals.
They both have incredible properties that can make them very valuable. Platinum and palladium demand are both driven by the autocatalyst market but also jewelry.
They are rarer than gold and silver and produced in only a few countries around the world, making their supply more sensitive to changes.
While gold and silver have always been the obvious victims of counterfeits, even platinum products are now being counterfeited with great skill and success. Counterfeit precious metals coins and bars are flooding the market at an astonishing rate, and are continually improving in quality and appearance. Only deal with well-known and reputable bullion dealers and national mints such as the U.
Mint and the Royal Canadian Mint. Do not buy precious metals online from unknown sources. The good delivery rules include specific requirements regarding the fineness, weight, dimensions, appearance, marks and production of gold and silver bars. Important information about the Trusts, including the investment objectives and strategies, purchase options, applicable management fees, and expenses, is contained in the prospectus.
Please read the prospectus carefully before investing. If the units are purchased or sold on the TSX or the NYSE, investors may pay more than the current net asset value when buying units or shares of the Trust and may receive less than the current net asset value when selling them. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.
This communication does not constitute an offer to sell or solicitation to purchase securities of the Trusts. There is no assurance that any Trust will achieve its investment objective, and its net asset value, yield and investment return will fluctuate from time to time with market conditions.
There is no guarantee that the full amount of your original investment in a Trust will be returned to you. The Trusts are not insured by the Canada Deposit Insurance Corporation or any other government deposit insurer. The information contained herein does not constitute an offer or solicitation to anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation.
Prospective investors who are not resident in Canada or the United States should contact their financial advisor to determine whether securities of the Funds may be lawfully sold in their jurisdiction. The information provided is general in nature and is provided with the understanding that it may not be relied upon as, nor considered to be, the rendering or tax, legal, accounting or professional advice.
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