December 28, 2020 | AtoZ Markets – Precious metals are great additions to your investment portfolios for several reasons. They are great safeguards against inflation and are easy to liquify during economic unrest. Precious metal value also moves against the US dollar, which is why you can expect spot price hikes when the currency value goes low.
Precious Metals and Spot Prices
There are several varieties of precious metals you can invest in, but not all are ideal to invest in today. The following precious metals have proven to be strong against the 2019 and 2020 unstable economic status.
Palladium may not be as popular as gold and silver, so many may be wondering—is palladium a good investment? You’ll be glad to know that it’s a worthwhile asset to add to your portfolio. The precious metal has origins in South Africa and Russia with a demand that caters mostly to the automotive industry. With the current spot price of USD$2,353.40 per ounce, the rising demand can be owed to the manufacturers using palladium for catalytic inverters to comply with strict pollution laws.
The future of palladium demand looks bright because it’s a massive component for vehicles. Coming improving environmental standards, particularly in China and the US, to ease global warming, devices made of palladium will be in higher demand, which will likely keep prices high.
The bright yellow precious metal is the most popular because it is abundant enough for bullion production, but not so common that everyone can process it. It also doesn’t corrode like other metals and is malleable enough to take on various forms. Gold is a major diversifier, and its value is determined by different factors other than supply and demand. Central banks have reserves of it as an inflationary shield. It’s easy to sell, but it is scarce. The typical annual gold demand is worth $166 billion, but today’s spot price is at $1,867.18 per ounce.
Currently, gold value is at a standstill because of the low inflation percentage under 2%. The population concern over obtaining stimulus does not necessarily mean it will contribute to the economy. Trade wars nor Brexit has affected inflation. As gold moves in the opposite direction of the economy, there’s no sign that it will go on a price hike.
While silver does not carry the same value as gold (today’s silver spot price at $25.38 per ounce), investors are still adding it to their portfolios. It’s mainly used in the jewelry, electronics, coin, and photography industries. It’s been gaining traction for the last seven years, ending at 39% since July. Silver’s price makes it a good alternative to gold if you can’t afford the latter, and it is easier to sell than gold.
If you look into the bull markets, it’s outperforming gold because the silver market is getting smaller. As of today, only the United States, India, and Mexico are housing silver. The scarcity is also a factor keeping silver at its price point. Silver is also not used in coins anymore; part of its value is its growing industrial uses and continuous global demand.
These precious metals are currently leading the market, with industrial demand influencing their spot prices. You can do more research and price monitoring at the precious metal market to determine if the movement satisfies you. Investors vary, and this type of investment is not for everyone. However, the recent market watch continues to report that precious metals continue to attract investors. They want tangible assets that they can hold and are that are easy to liquify. Search for reputable sources and brokerage to get more information.