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How to Invest in Precious Metals: The Ultimate Guide



Did you know it’d take roughly 151 months for the stock market to recover from a full-blown crash?

Shocking, right? That means it’d take almost 13 years for your stocks to recover if a recession occurred. Unless you’re Jeff Bezos, this is too long to wait for market recovery.

So, what do you do? Simple: Diversification is the answer to minimizing risks, so consider other investments. You can invest in precious metals to protect yourself and maximize your portfolio.

But precious metals investing isn’t as easy as it appears. Contrary to popular belief, these assets aren’t entirely risk-free. So, you need to understand what they entail before buying them.

Curious about how to invest in precious metals? Read on for all the information you’ll need to make an informed decision.

Let’s get into the details!

What Are Precious Metals?

Precious metals are rare, tradeable minerals with a significant economic value. Their value comes from their high demand, scarcity, and ability to store wealth. Here are some of the precious metals to consider buying if you’re interested in investing.


Chances are, your mind races to gold when you hear ‘precious metals.’ And this is with good reason. Gold is the most popular precious metal because of its unique characteristics.

It doesn’t rust, meaning investors can store it for as long as they like. Gold also carries various uses, from jewelry making to electronics manufacturing. Hence, you can rest assured that this precious metal will always have a high demand.

It’s also popular since it carries lesser risk than any other investment opportunity. It proved stable even during the economic recession, making it an excellent way to store your wealth.


Silver is more available than gold, hence its cheaper price tag. This isn’t to say that the metal isn’t an excellent investment, because it is. Its many industrial uses guarantee its long-term demand in the commodities market.

It’s used for making jewelry, photographic films, and electronic appliances. You may need to purchase more silver than gold to realize the same profit, but it’s worthwhile. It’s an excellent option for investors looking to buy precious metals for the first time.


Like gold and silver, platinum is an excellent choice if you want to purchase precious metals. It trades daily on the commodities market, so you can always buy or sell it.

Nonetheless, it’s more expensive than gold, so you need substantial capital. Platinum is rare because it’s mainly concentrated in South Africa and Russia. It’s also in high demand because of its many uses. Here are some common platinum uses:

  • Automotive catalyst
  • Jewelry making
  • Petroleum refining catalyst
  • Dentistry equipment

As you can see, platinum is a critical raw material for some high-value industries. Therefore, it’ll always carry a favorable price, even during market falls.


It’s more than likely that you’ve never thought of palladium as a precious metal. Nonetheless, investing in this precious metal can be pretty profitable.

Vehicle manufacturers prefer this material to its more expensive sister, platinum. Companies in medical and dentistry equipment manufacturing also buy this precious metal. Like the other options, it has a ready market you can sell to when you eventually decide to do so.

How Can You Invest in Precious Metals?

The precious metals market offers various buying options for investors. Here are some of the most popular ones to help you decide on the best option for you.

Physical Form

This is one of the most popular ways to purchase precious metals. Depending on your budget and preference, you can buy gold and silver as coins or bullions. Other metals are also available in these forms or in slightly altered configurations.

There are many benefits to buying these metals in their physical form. The most significant one is that you get complete ownership of the product. You can sell or alter it at any time without needing to consult any other party.

However, you’ll need to consider several factors when buying physical metals. The first is the product’s fineness, as it determines its price. It’d be best to hire a professional to assess a metal’s purity before buying it.

Also, be careful when choosing dealers since not all are trustworthy. Get your precious metals only from individuals or companies with good reputations. You don’t want to buy fake gold or silver at the regular price.

It’d also be best to think about your storage options. Remember, most of these metals are highly valued and at a high risk of theft. Find a secure and well-insured facility to store yours.

Exchange-Traded Funds (ETFs)

Think of ETFs as a perfect blend of the stock market and mutual funds. After all, like stocks, they’re easy to trade. Besides, they offer the diversification benefit of mutual funds.

But ETFs are different because you can’t access them as an individual investor. Instead, these funds are sold to brokerage firms in blocks. The firms then sell them on the open market, giving you an investment opportunity.

Precious metal ETFs operate a lot like regular ETFs. They allow investors to trade without actually owning the metals. Also, you can exchange your ETFs during regular stock market hours.

You can also store your ETFs in your Individual Retirement Account (IRA). This is the preferred holding option because it protects investors from incurring taxes.

When buying ETFs, ensure you do sufficient research beforehand. Find the best-performing ETFs before investing your hard-earned money. You can also seek professional help, especially if you’re new to investing.

Stocks and Mutual Funds

You can always buy mining stocks and funds if you’re not interested in physical assets. These operate a lot like regular shares and mutual funds. So, you can easily navigate them if you’re an avid stock trader.

What happens is that you buy the shares of a precious metal mining company. You’ll earn through stock appreciation from increased precious metal prices.

Stocks are an excellent option if you want to avoid the hassle of storing precious metals. But, they’re not entirely free from risk.

Some companies tie their stocks to company profitability, not price increases. You may not realize a positive return on investment if your company registers losses. Note that losses could occur even when metal prices are favorable if a company incurs too many costs.


Futures are another excellent option if you want to buy precious metals. Like regular futures, precious metal futures involve a lot of speculation.

They allow investors to bet on price movements without taking assets’ physical ownerships. They’re a great option if you don’t want the risk of actual ownership.

But, this isn’t to say that precious metal owners can’t use futures. You can use them to mitigate your risk in case prices fluctuate.

Of course, the chances of this happening are low since precious metal prices are stable. But as is with anything else, it’d be better to be safe than sorry. Buy futures if you’re concerned about future market uncertainties.

Precious Metal Backed Crypto Currency

This is quite a mouthful, isn’t it? But it’s not as complicated as it appears. This option is exactly as the name implies. It’s a cryptocurrency backed by precious metals.

We don’t blame you if you’re suspicious about this option. After all, doesn’t cryptocurrency beat the purpose of precious metals?

While it’s true that cryptocurrency can be unstable, it can also provide currency security. So, think of this investment opportunity as a double-sided coin.

Minting companies like Dillon Gage are still working on this, so it’s pretty new to the market. It’s an excellent option if you have a high-risk tolerance.

What Are Some Common Precious Metals Investing Mistakes?

Unfortunately, you’re prone to making mistakes when investing if you’re a beginner. We’ll look at common ones to ensure you don’t fall victim to them. Let’s get started!

Assuming Physical Precious Metals and ETFs Are Similar

New investors often believe that ETFs offer the same benefits as physical assets. While both are beneficial in their own rights, they aren’t the same.

Physical ownership of the metals gives you complete power over their uses. You can store them or transport them in their physical form to any location.

Nonetheless, this isn’t the case for EFTs. With EFTs, all you own is a promissory note from your fund’s managers stating your shares in the fund.

You can trade them, but not as easy as you would the physical asset. So, always take time to understand your options before investing in either.

Doing Minimal Research

Investors fall prey to scams because they don’t do research before buying precious metals. Talk to expert traders about their experiences in the precious metals industry.

Pay particular attention to the benefits of each metal and how best to buy them. Also, ask about the gold IRA option if you’re considering retirement planning.

Blaming the Strategy

Investors with unrealistic expectations often adopt varying strategies within short periods. They believe that their strategies are the problem though they aren’t.

As mentioned before, you can’t compare precious metals to assets like stocks. You can make a killing in the stock market within a few weeks if you play your cards right.

But, these metals are long-term investments. Buy precious metals after planning for the time it’ll take to realize high gains.

Unrealistic Expectations

Did you know that the gold price per ounce rose by roughly $530 between 2018 and 2021? Precious metals don’t appreciate overnight like other investment options.

Investors go wrong by assuming they’ll make a killing in the first few weeks or months of trading. You can make money during this time, but not to an outrageous extent.

Precious metal investing needs patience since it takes time for the metals to appreciate. They offer an excellent investment opportunity for long-term rather than short-term investors.

Is It Worthwhile to Invest in Precious Metals?

Being skeptical about buying precious metals is normal if you’re a new investor. There’s no need to be worried since these assets’ benefits outweigh their risks. Here are some of the benefits you can enjoy when you buy precious metals:

Protection From Market Volatility

Precious metal prices are independent of other markets’ movements. So, you don’t have to worry about losing money when the stock market falls or inflation rises.

These metals are the ideal solution for mitigating price fluctuations. Their prices will remain relatively stable even in the most unstable conditions.

You may even make a killing when other markets are unstable since investors will rush to buy the metals. Remember, increasing demand translates to higher prices.

High Liquidity

Precious metals have guaranteed demand regardless of market movements. They carry many uses, from jewelry making to electronics manufacturing.

So, you can rest assured that you’ll get buyers whenever you decide to sell. Of course, the ease of selling will be determined by your precious metals’ forms. Physical assets may sell quicker than other options as most traders prefer them.

Perfect for Diversification

The S&P 500 fell nearly 4% recently, showing the stock market’s volatility. Such abrupt falls are the main reason investors should consider buying precious metals.

They reduce your overall risk as they’re more stable than other investments. With these assets, market falls won’t impact your way of life too drastically.

Combining these assets with short-term investments would be best since they’re long-term. You can hire an investment advisor to develop an optimal portfolio if you’re new to investing.


This benefit hinges on buying physical precious metals instead of other forms. However, it’s a benefit you can’t ignore since there’s a sense of pride that comes with owning them.

Tangibility gives you a sense of power you can’t find with other options. You can pass on your precious metals to future generations easily. You can also sell the assets at a moment’s notice without having to consult with anyone else.

Invest in Precious Metals to Grow Your Wealth

Deciding to invest in precious metals is an excellent move. It’s normal to be scared about buying your first precious metals if you don’t know your options.

Gold, silver, platinum, and palladium are the most popular precious metal choices. You can buy them as physical assets, EFTs, futures, or stocks.

So, don’t miss out on your opportunity to join the precious metals marketplace.

If you need more investment tips and advice, we have tons of articles that might interest you. Feel free to browse around for more related content.

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