Precious Metals Investing 101
There are various important decisions you need to make before you get started with precious metals investing. Some of these include the following:
Numismatics VS Bullion
Bullion is the term, which refers to the precious metals that are sold, bought or owned for the value of its metal content and not really a special collectible, historical or numismatic value. Rare, numismatic or semi-rare coins, on contrary, are being sold and bought for higher price compared to the metal that’s worth because of special value. While several bullion would carry premium over some bullion forms, the idea behind bullion is still the same, the bar or coin represents the purity and weight of the precious metals that has stamped on the metal’s surface. Gold is of specific significance.
Silver VS Gold
Gold has been considered the grandfather of all precious metals, yet most investors feel that silver is a strategic investment in the market. Nevertheless, every investor must carefully consider the differences between silver and gold:
Tradability VS Portability
Due to denser composition and higher value, gold is by far easier compared to silver in terms of storage, transporting, and concealing. However, silver is considered to be much easier to barter, trade, sell, and buy. Since silver coins range between $5 and $25, they’re far superior for bartering and spending on daily basis or selling and buying in smaller portions.
Ease of Liquidation VS Lower Premium
As the golden rule, the smaller coins are much easier to sell to some coin shops and investors or to use in barter or trade situation. Typically, you’ll pay more than the spot price to purchase such coins. On contrary, bigger, costlier bullion items can be bought with lower premiums over the spot prices, yet may present more challenges when you’re looking to sell it. Before you purchase, ask why you should purchase precious metals.
Silver as the Industrial Commodity
The dual purpose of silver as a precious metal and an industrial metal makes special pros and cons. Due to the use of silver in manufacturing, the silver’s price could be sensitive to the downs and ups of manufacturing. This fact, combined with the smaller price per ounce of silver can make the market of silver much volatile compared to gold. Oftentimes, silver is considered as a double-edged investment since its industrial use provides its strength in times of an economic prosperity and its precious metal use offers it strength as hedge against the failing US dollar as well as weakening global economy.
Platinum and Palladium
Due to the highly specialized industrial use, platinum and palladium aren’t the common choices for the new investors. Palladium and platinum may be strategic investments in numerous cases, yet investors must research the background and history of palladium or platinum before buying. Investors must also be aware that several traditional outlets for the retail of the precious metals might not be as conducive to buying palladium or platinum as they would with silver and gold.
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