Understanding the Elements of Precious Metals Investing

Filed Under Business Investment.

Understanding the Elements of Precious Metals Investing 5.00/5 (100.00%) 7 votes

Precious metals investing is, quite naturally, usually only discussed in terms of the financial value that the metals involved have. These metals include platinum, palladium, gold and silver. These four metals, as an article on Credit-Crisis.com points out, have ISO currency codes and are subjects of great interest to the financial markets around the world. There is more to these metals than providing opportunities for precious metals investing, however, as the article points out.

What Are They?

Precious metals investing involves the buying and selling of metals that are rare, that have a luster to them and that have properties that make them valuable to industry and finance. Gold, for instance, has been used for thousands of years as a form of currency and as a backing for paper currency. Today, it is not used as a backing for currency any more, but it has a new role as a hedge against currency inflation. This all does beg the question, however: Why was gold ever so popular as currency?

Precious metals, gold in particular, tend to be malleable. This makes them easy to cast into coins and to divide into smaller pieces, which are perfect qualities for any type of currency. Silver has these same properties—though it’s not quite as malleable as gold—and that has made it a popular form of currency, as well.

Gold and silver have been used as currency for literally thousands of years. Platinum and palladium have not been used for quite as long but they have important roles in precious metals investing.


As you probably are aware, there isn’t the same association with currency and a platinum standard or a palladium standard, as there have been gold and silver standards. The Russian Empire used platinum for coinage for a time, but it was regarded as a generally poor choice for making coins, as it lacks the malleability of gold and silver. Why, then, are platinum and palladium so intensely followed by the world financial markets, to the point of even having their own ISO currency codes?

Platinum and palladium are both rare and they have the same properties as gold and silver, but have their differences, as well. For instance, it might not be as easy to make platinum coins as it is to make gold coins, but platinum is used in a variety of industries and is in constant demand because of that. This makes it very valuable and a metal that is worthy of being exchanged in markets all over the world.

Palladium is in the platinum group of metals and shares many properties with platinum. It is not nearly as rare, however, and is used in a variety of different industrial applications, giving it immense practical value in addition to it being scarce enough to qualify as a precious metal.

Precious metals investing means investing in substances that have interesting and useful properties. The properties and scarcity of these metals make them very valuable, as the market prices these days tend to reflect!

Invest Tags: , , , , , , , , , , , , , , , , , , , ,