4 Questions to Ask Before Investing in Precious Metals

Picture: Anne Nygård

Investing in precious metals as a business or individual can be a significant decision to make. You might not be familiar with how this investment type works, or you simply have many questions you’d like answers to before taking the leap. If the time has come to diversify your portfolio and try something new, here are a few questions you might like to ask an expert before investing in gold, silver, or other precious metals.

Should I Invest in Physical, Digital, or Exchange-Traded Precious Metals?

You might think that by investing in precious metal, you’re purely investing in a tangible object, but that’s not always the case. You have the choice of purchasing physical metals like bars and coins, digital precious metals, and exchange-traded metals.

You can also purchase certificates that aren’t backed by a precious metal and don’t provide an ownership title. Physical gold, silver, and other metals that come with ownership titles or fully-backed exchange-traded investment options are generally the better investment choices for many people.

Where Do I Store My Precious Metals?

Unlike many investment options like real estate and stocks, precious metals require you to consider more than prices and risk. You also have to think about safe storage to keep your investment safe. Consider insured storage providers for peace of mind and even bullion banks. Some investors also keep their precious metals in home safes, safety deposit boxes, and bank vaults using a checkbook LLC.

How Do I Sell My Precious Metals?

If a new investment opportunity comes your way, such as a startup venture or something particularly lucrative, you might decide to liquidate your precious metals investment and try something new.

How you sell your precious metals can depend on how you purchased them. For example, physical metals can typically be sold through precious metal traders, of which there are many to choose from. If you have exchange-traded and closed-end funds, you can easily buy and sell on an exchange platform by yourself or with the help of an investment expert when the time is right.

What Are the Best Precious Metals to Invest In?

Any investment you consider requires research, and precious metals are no different. You may like to explore gold, silver, platinum, and even palladium when you’re looking for something new to put your profits into.

In times of economic downturn or upheaval, gold is often considered a safe haven. Many investors consider it an effective diversification option, and it has very little counterparty risk. However, silver might be deserving of your attention. Silver is cost-effective to purchase and is ideal as a form of money for industrial purposes. It’s worth keeping in mind that its price can be more volatile than gold.

Palladium and platinum are among the lesser-known and rarer precious metal investment choices. They are rarer than silver than gold and are driven by the jewelry and autocatalyst markets. They can also cost more to purchase than gold and silver.

The more you know about your investment options, the more confidence you might have in your investing choices. Precious metals like gold, silver, palladium, and platinum might be worth your consideration when the time comes to put your profits into something unique.

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