Hard currency: gold, silver, platinum…

investments

Have you ever wondered how precious metals differ from precious metals, and what is the reason for their high price on the market? Precious metals are called for their natural properties – resistance to corrosion, oxidation and beautiful appearance. But they become precious due to the limited proven reserves and accordingly their rarity. The percentage of precious metal extraction in the total volume of production produced by the world mining industry is only 0.00005.

Today, gold, silver, platinum and palladium are not just raw materials for the jewelry industry – they are metals that are perceived by many as the most stable assets, which contributes to the formation of their positive price environment in the market. Moreover, some financiers are completely convinced that precious metals are true money, because they are not subject to inflation, while other means of payment (currencies) are only cash equivalents.

There is also a diametrically opposite point of view, according to which any precious metal is a commodity. And like any commodity, gold, silver, platinum or palladium can both become more expensive and cheaper under the influence of often completely unpredictable factors, so investing in them is a risky decision. It is logical that this has its pros and cons.

The indisputable advantages of investing in precious metals include the following:

Unlike securities and cash, which sometimes (remember the lessons of history) turned out to be unsecured pieces of paper, gold, silver, platinum and palladium always have an independent value. This means that their value will not fall to zero even during the most global and protracted economic crisis. In unstable times, prices for precious metals grow in parallel with demand.

There are many ways to invest money in precious metals: from the banal purchase of bullion to the opening of an impersonal metal account, which allows you to choose the most appropriate investment strategy, taking into account your own preferences in terms of risk and profitability.

In contrast to the advantages — there are two important features of investing in precious metals, which are perceived rather as disadvantages:

Any precious metal should be considered only as a long-term investment (at least 5 years, and even better – 10-15). If you plan to buy a gold bar in order to sell it more expensive in a year, we hasten to disappoint you – such an investment, most likely, will not only bring no income, but may well turn into losses.

investing

Predicting the return on investment in precious metals is sometimes difficult even for financial analysts. After all, the price of gold, silver, platinum and palladium is determined by global factors. To keep money in precious metals and even more so to increase funds, you need to understand well what is happening on the world market, otherwise there is a risk of being left with nothing.

The most popular metal for investing is gold. Chemical resistance, uniformity, strength, and the ability to preserve its properties for a long time made it a reliable means of payment several thousand years ago. With the advent of paper money, most of them were tied to gold. Having survived many wars and inflations over the centuries, gold is considered an eternal currency. It is stored in the reserves of central banks of all countries in the world.

As for silver, some experts believe that it is gradually losing its role as a precious metal. It can rather be considered as a technical metal. Platinum and palladium have only come into circulation in the last hundred years and have not yet received such recognition as an instrument of accumulation as gold. These metals are more used in industry  and therefore the demand and price for them increases during the general economic growth.

So how much to hang in grams?

This humorous phrase from an old commercial is relevant even in such a serious matter as investment. After all, one of the most common ways to invest money in gold is to buy dimensional bars. The price of a hundred-gram gold bar for sale to individuals and legal entities, set by the National Bank, is just over 10,286 rubles. Here, for sure, every gram is worth its weight in gold.

It t is legal to buy or sell precious metals in the form of measured ingots in the divisions of the National Bank, as well as in banks that have a license to carry out relevant operations. The purchase and sale prices of precious metals  are set by banks on a daily basis, taking into account quotations on the international market.

According to financial market experts, the investment attractiveness of bullion is quite low. After all, you can buy them legally only at the price offered by the bank. Sell – also exclusively on the terms of the bank. And, as a rule, the difference between the sale and purchase of the financial organization of its own bullion is quite significant. Moreover, the bank will accept the ingot only if it is perfectly preserved externally and has a special certificate. Therefore, it is better to store the ingot in a special cell where you will also have to pay for this service.

A similar way of investing is the purchase of coins made of precious metals. The price of such a coin is tied to the value of the metal from which it is made. In general, it is quite convenient: you can choose a gold or silver coin of the desired value and store it at home without any problems. Of the minuses, it is important to take into account the fact that the value of coins is set by the bank with a serious mark-up relative to the net value of the metal.

A good alternative to dimensional bars and coins is trading in precious metals with their placement on depersonalized metal accounts. The essence of this service is to purchase depersonalized metal from the bank for cash or by debiting funds from the client’s account.

Benefits of depersonalized metal accounts.

the possibility of saving and multiplying funds due to the growth of the value of precious metals;

the ability to diversify the investment portfolio with investments in precious metals, which reduces the risks of losses associated with negative changes in financial markets;

availability – free account opening and maintenance;

high liquidity – the sale of metal from the account in an impersonal form is carried out by the bank on the day of the client’s request;

the cost of depersonalized precious metal does not include the costs associated with the production of ingots, their storage and transportation.

And finally, the last, and perhaps most controversial, way to invest: buying jewelry. Why dubious? It’s simple: buying earrings and rings  unfortunately are unlikely to earn, since their retail price is several times higher than the cost of pure metal in them. And in the purchaser will focus on the cost of metal. So in the best case, you will be able to return only a part of your funds, unless, of course, it is a rare family decoration of the royal family, which is hunted by collectors.

Rate article
Add a comment