Investing in precious metals: All you need to know!

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investing in precious metals

If there is one investment strategy that has proven itself repeatedly, it is that of precious metals.

Investing in precious metals is probably one of the oldest strategies in the world. Dating back to ancient times, people have always valued precious metals as a source of wealth and security.

Coming to the modern era, things might have changed, but the old practice remains. People still invest in precious metals as they did before. If anything, the practice has grown by leaps and bounds, with a demand that is ever increasing with each passing year. 

Given in the points below are some of the key points to consider regarding investing in precious metals.

General introduction

The term ‘precious metal’ refers largely to two specific metals; namely gold and silver, usually purchased as ‘bullion.’

In addition to this, there are other metals which can also be considered as precious such as platinum. Such elements are still rare in the precious metals market, which is mostly dominated by gold and silver.

Buying precious metals is one of the best investment strategies you can go for.

It has been so for a very long time. This is due to a straightforward reason, which is the availability of these precious metals. There is only a finite amount of these metals available on the earth, which makes them a very valuable commodity. And considering that they are continually being mined across the world, the total quantity available is steadily declining.

What this means for the average buyer is that these metals steadily become scarcer, with each passing day. In other words, they steadily increase in value every single day, albeit with some fluctuations. And this is not speculation either. If one looks at the value of gold, it becomes clear that the value of gold has been increasing year after year. Therefore, the investment made in precious metals like gold or silver is bound to rise, with each passing year.

1. Understand the value of the metals

precious metals value

The next thing you will need to figure out is the value of the gold or silver bullion.

If you take a look at prices for precious metals, you’ll probably notice some differences in the rates. This is because each seller adds his margin to the final price. In addition to this, there is also the issue of ‘wastage charges,’ which are incurred whenever metal is processed; which is passed on to the buyer.

This is important to address, for if you don’t know the current market value of precious metals, you might get cheated. Even if the seller isn’t out to trick you, you might still end up paying more for the precious metals than otherwise.

2. Study the price charts

metals price charts

This is yet another important thing to take into consideration before buying precious metals.

It is essential to know the current value of the precious metals. However, it is also equally important to know the previous value of the metals, at least to the tune of the past few years.

And there is a reason for this:

It has nothing to do with saving money, but rather to understand the potential for returns. If you aren’t aware of how the prices have fluctuated in the past, you will not know what to expect in the future. The result is you might waste away your money. In other words, if you know the way prices have fluctuated in the past, you will be able to plan your investment amounts accordingly. A high degree of fluctuation is an indication that it is not an ideal time for investing in precious metals. On the other hand, a steady increase in the prices is an indication that time is perfect for investing.

3. Know your seller

know your seller

There are plenty of sellers of precious metals in the market.

But not all of them are good sellers. On the contrary, many of them are out to make a quick buck at your expense.

Therefore, it is crucial that you know the seller very well, and verify his reputation before you make a purchase.

4. test the metal yourself

test the metal

That it is shiny and yellow is not an indication that it is gold. And the same is true for other metals such as silver or platinum.

There is a genuine possibility that the ‘precious metal’ you are buying isn’t really precious metal, but rather something else. An excellent example of this is that of gold.

There have been instances where people have been sold what they thought was ‘gold,’ only to later find out that it was just Tungsten plated with gold. Tungsten is an especially popular choice for these scams, as it has a similar density and other such characteristics, to that of gold.

Therefore, learn to test the metal if you really want to be sure of its authenticity. If you want to be sure, you could take an expert with you as well, who could help you out with the testing process. If nobody is available to help you out, try to buy one of the many portable testing kits that are readily available online.

5. Create a safe place to store the metal

investing in metals : safe place

Last but not least is finding a safe place to store the metals.

You can either store them at your home or in a bank locker. This decision is of course up to you.

The main point to note here is that the precious metals you buy are to be stored in a safe place. If they aren’t secure in their storage, there is no point in buying them, to begin with. 

In fact, it would be a good idea to first figure out where you will be storing your purchases before you actually make the purchase.

As a whole, investing in gold is one of the best investing strategies that you can ever come across.

Having proved itself time and time again for its resilience, investing in precious metals is an excellent avenue for financial stability and growth. There are specific issues you’ll need to take care of, but the effort will all be worth it in the end.

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