Are Precious Metals a Good Investment Opportunity?

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Are you wondering if precious metals are a good investment opportunity for you? Follow this quick guide to help you make your decision.

Have you ever thought about how gold is nothing more than a shiny rock that we placed great value upon thousands of years ago? Even so, today, gold is one of the most popular precious metal investments you can choose from, right behind silver and platinum. But the real question is if investing in precious metals is a good investment opportunity.

How can you know if gold, silver, or platinum are good investment options for you? And if they are, should you invest in bullion coins, bars, or trade certificates? Luckily, this article will teach you everything you need to know about investing in precious metals.

All investing comes down to is how much money you have to invest and what you want to do with your investments. To start off, let's take a closer look at the history of gold, the precious metal that started it all, so we can better understand why precious metals are so precious in the first place.

A Short History of Gold

Early civilizations started to fixate on gold about four thousand years ago. However, gold was not yet used in a monetary system at this time. Instead, it was prized by the ancient Egyptians for jewelry.

This idea of the gold coin was immediately adopted and archeological records show how gold coins as currency were used from the ancient Greeks and Romans to the people of the British Isles. Today, American and British currency is based on the gold that was originally used as the currency of these countries.

Silver also became a part of the monetary system in the ancient world, but it was never priced as highly as gold. Platinum, on the other hand, was and still is so rare that it never had the same chance as silver and gold to enter the monetary system.

Many governments these days, however, no longer have monetary systems backed by real gold. Although, this does not mean that gold no longer has any value because it is no longer used as currency. Gold, along with other precious metals, still has impressive investing power.

Let's take a better look at what you should expect when investing in gold, followed by silver and platinum.

Investing in Gold

gold bars

There is no right way to invest in gold. Investing in precious metals depends on what you want from your investment and how much money you are willing to spend. It also depends on how you want your investment to react to the ever-changing economy.

Once you sort out all these factors, you can start thinking about how to invest in gold. First, it's important to know that buying gold as an investment is often a good idea, no matter the state of the economy. Why?

This is because gold is considered a safe-haven investment. Wars can break out all over the world and make the rest of the world panic. When this happens, the economy tends to fluctuate and people can end up losing a lot of money.

Gold, however, has the unique characteristic of staying relatively stable in terms of price no matter what the rest of the economy is doing. This is because gold has an inherent value so there's only so much its price can drop.

Another reason why buying and selling gold is a great idea is because gold preserves wealth. Think about it: if you invested in gold forty years ago and kept it until today, you would be able to buy something of nice value with that gold both forty years ago as well as today. On the other hand, if you had a bill of twenty dollars forty years ago and kept it until today, you would not be able to buy the same things as you might all those years ago.

In short, while paper money can decrease due to inflation, gold cannot be depreciated in the same way.

Investing in Gold Bars

Many people wonder whether they should invest in bars, coins, or some other form when it comes to precious metals. It all depends on what you're looking for from your investment since all of the investment options for precious metals are beneficial in their own way.

It also depends on whether you want to invest in gold in its physical or nonphysical form. Keep in mind that these different forms of investing can also apply to silver and platinum.

When most people think of investing in gold, they think of big, shiny gold bars. Gold bars are the purest form of gold that you can buy. A gold bar should be at least 99.5% gold, if not 99.99%. There is only one disadvantage, or benefit for some, when it comes to investing in bars: they can be very hefty and hard to store.

When buying even a single gold bar, you have the option to buy a very large amount of gold compared to buying a single gold round or coin. This makes gold bars the most cost efficient on a per ounce basis, but you need to invest considerable money to take advantage. However, if money is not an issue for you, this heftiness can work to your advantage because you can invest in a large quantity of gold in a short amount of time.

Gold bars are also attractive as an investment because they are physical. More than that, gold bars can be easily liquidated if you need to use their value fast. They are also great as a long-term investment because of the way they hold their value.

Gold bars are easy to store as well. They can be piled on top of each other in any safe space and you don't need to worry about your investment getting lost or damaged.

Looking to invest in physical gold? Check out our collection of gold bars and coins here.

Investing in Gold Coins

If you don't want to spend huge chunks of money investing in gold bars, gold coins might be the next best option. This is because gold coins aren't all that much different from bars except for their size. They are still pure gold, much like bars.

One of the many benefits of gold coins is that they are more liquid than gold bars. If you need money in a pinch, you will more easily be able to obtain money for a gold coin than a bar. Gold coins can also have great value for coin collectors, sometimes more valuable than the amount of gold is actually worth.

The downside is you may not be getting as many ounces of gold for your money when you buy coins compared to bars. Coins may also be harder to store than bars since they often need to be organized.

Investing in Gold ETFs

You can also invest in nonphysical gold such as ETFs or exchange-traded funds. ETFs are even more liquid than coins and bars and they are stable as well.

However, investing in nonphysical gold can come with downsides. For example, ETFs might not preserve wealth as well as physical gold can. This can increase your risk of losing money on your investment with time.

Investing in Silver

silver bars

The main thing to know about silver is that its price can be more volatile than gold. This, however, does not mean it's not a good investment. In fact, it can still be quite a stable investment.

One reason why silver is a good investment is that it is always in demand. Silver is used in various kinds of technology and devices which means its value isn't likely to decrease too much. Physical silver has all the benefits of physical gold as well: it preserves wealth and you don't need to worry about losing the value of your silver the way paper wealth can lose value.

As with gold, during periods of economic uncertainty, people will scramble to invest in silver. While not as stable as gold, silver can still act as a safe haven investment, especially when you invest in silver coins or bars. A big benefit of silver is that it is usually cheaper than gold.

A downside is that silver may decrease in value more than gold during economic recessions. This can lead to a loss on your investment. However, if you wait long enough, you will most likely gain back what you lost since silver tends to stabilize with time.

Investing in Platinum

platnium bars

Investing in platinum can be tricky for one main reason: it is very rare compared to silver and gold. If you are a new investor, you may be thinking, "If platinum is rarer than gold, it should be more valuable and therefore a better investment." However, this is not necessarily the case.

As with silver, platinum has many industrial uses and these uses are important for regulating platinum's value. Platinum is not only rare and hard to find, but it is also harder to mine than softer metals like gold. Because of this, it can take a long time for physical platinum to be available.

Because there is not a lot of platinum to invest in, its price can vary significantly, even more so than silver and gold. Therefore, platinum is not as much of a safe haven investment as silver and gold can be. Instead, platinum is an investment for investors who aren't afraid to take risks.

This is because platinum can skyrocket in value without warning and it can plummet just the same. Because of this, you will need to keep a closer eye on the market than with other precious metals. You will also need to keep an eye on the countries where platinum is mined since the status of these countries can influence the availability and value of platinum.

If you are an experienced investor and are not afraid of risk, you can try tackling platinum as an investment. On the other hand, if you want an investment that is stable and that won't cause you as much stress, try investing in silver or gold.

Choosing the Right Precious Metal as an Investment Opportunity

I hope at the end of this article, you know more about what to expect from investing in precious metals in physical and nonphysical options. If you are ready to invest, or perhaps have more questions about physical precious metals, contact us here.


Don’t miss a golden opportunity.

Now that you’ve gained a deeper understanding about gold, it’s time to browse our selection of gold bars, coins, or exclusive Sprott Gold wafers.

About Sprott Money

Specializing in the sale of bullion, bullion storage and precious metals registered investments, there’s a reason Sprott Money is called “The Most Trusted Name in Precious Metals”.

Since 2008, our customers have trusted us to provide guidance, education, and superior customer service as we help build their holdings in precious metals—no matter the size of the portfolio. Chairman, Eric Sprott, and President, Larisa Sprott, are proud to head up one of the most well-known and reputable precious metal firms in North America. Learn more about Sprott Money.

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