Investing in Precious Metals

As the latest horror stories unfold on the global financial markets, the need for you as an investor to diversify and adjust your investment plan and portfolio has become more a topic of importance than ever. So, what can investing in precious metals offer you?

With the ASX falling again on a tumbling oil market, and the housing market pinned as the next to plunge, your everyday Australian investor is running out of options for a sure thing to peg their bets on.

Precious Metals Against Uncertainty

However, options still exist that may just help you sing a song of faith. As reported by Nine News in the past week, “Gold soared nearly 2.0 per cent to hit its highest since late 2012, with investors rushing to the safety of bullion as the coronavirus ravaged economies worldwide…”

The report goes on to state that, “The global economy is expected to shrink by 3.0 per cent during 2020 in a coronavirus-driven collapse of activity that will mark the steepest downturn since the Great Depression.” 

However, at the time the article was published, gold soared nearly 2.0 per cent to reach its highest since late 2012, silver increased 2.3 per cent, palladium went up 1.2 per cent, and platinum gained 3.6 per cent.

As with much of the financial market, there has been a rise and fall across all asset classes with some more dramatic than others, however – like gold – during times of economic uncertainty, precious metals are sought after by many as a store of wealth and a hedge used to mitigate and manage portfolio risk.

Trading in the Precious Metals Group

With gold being the most well-known precious metal, included in the mix is silver, platinum, palladium, rhodium, ruthenium, rhenium, iridium, indium, and osmium. However, what does investing and trading in precious metals entail?

There are varied ways to gain access and exposure to the precious metals market, including through metal ETFs, mining company stocks, the derivatives market, and mutual funds. However, these are all options to secure paper gold – something that is noted as a risky choice considering that you rely on the health of financial markets and on fund managers to do their job properly.

The other option is to purchase the physical precious metal. As noted by Forbes, “Holding metals is a way of spreading portfolio risk during times of economic upheaval… in this uncertain environment, buying metals represents a safe-haven approach to diversification and a partial hedge against equities.”

In his article titled, 5 Questions To Ask Yourself Before Buying Precious Metals‘, Olivier Garret points out that, the main benefit of buying physical precious metals in the form of coins and bullion for example, is that you own the precious metal and that, “Furthermore, you own an asset that can be stored outside the financial system, which reduces counterparty risk.”

Mr. Garret goes on to explain that, “The best way to buy physical precious metals is through an online dealer that offers a buy-and-store program… Investors should avoid taking physical possession of their gold or silver unless they believe there is an emergency.  It’s much safer to have your bullion stored in a secure vault.”

Storage and Insurance Are Essential

At Private Vaults Australia, we offer safe deposit box services in our state-of-the-art storage facility, as well as the sale, purchase and secure storage of your precious metals, such as silver and gold bullion.

For more info on investing in precious metals, contact PVA or read the PVA blog for more interesting news, tips and ideas to guide you.

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