Investing in Precious Metals

By Jonathan Bales , last updated June 23, 2011

Investing in precious metals has long been seen as a way to prepare for hard economic times. Precious metals like gold and silver have always been viewed as valuable, and investing in them has picked up in recent years due to a struggling economy. Even though precious metals do not hold intrinsic value, they are the closest thing we have to it. Precious metals are seen as far less volatile than paper money. Read below for some tips on how to properly invest your money in precious metals.

The four major metals in which people invest are gold, silver, platinum and palladium. Many people realize these metals are used in the manufacturing of things like jewelry and coins, but they are also utilized to make electronics, medical equipment and so on. Gold is an excellent conductor and chemically stable enough to be used in a number of high-technology materials. Platinum is used in computer parts, while palladium is involved in the processes of water purification, photo processing, and the refining and purification of oil and natural gas. The wide range of uses for these metals adds to the stability of their value.

The primary reason why now is a great time to invest in precious metals is the inflated money supply. With more paper money comes future inflation, which is forcing commodity prices higher. Buying precious metals minimizes one's financial risk because it acts as a natural hedge against inflation and equities. There are a few ways to buy precious metals. You can purchase stocks which hold shares in mining companies, invest in exchange-traded funds, or purchase the real thing with coins or bullion. Coins that have been newly minted are better than antique coins because they cost less, as antique coins are often worth more to collectors than their value after being melted.

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