Precious Metals Investment Guide

As an investor, it’s always best to have a diversified portfolio. In fact, this is one of the most important investment objectives. If you are new to investing, you might think that stocks, bonds, mutual funds, or crypto are the only options. However, there are many precious metals investment products that you should also consider. Specifically, owning physical precious metals can help to diversify your portfolio, and many investors buy and sell precious metals to make money. Precious metals have intrinsic value, and there is no credit risk or cash flow, but they can fluctuate in value.

Are you ready to learn more about investing in gold, silver, and more? Keep reading!

Why Precious Metals Might Be a Great Investment

Having a strong precious metals portfolio can bring a lot of great benefits. These include:

Precious Metals Tend to Hold Value in Times of Economic Uncertainty

The precious metals sector is well known to have products that are valuable and serve as a great hedge against inflation. These metals are also rare, so it’s unlikely that prices would significantly fall. Finally, historically, these metals are known for their value over centuries, and have been used in commerce for thousands of years.

Precious Metals Have Many Uses

When most people think about precious metals, they simply think of jewelry. However, there are other uses of precious metals including use in electronics and industrial products, in the automotive industry, medical devices, semiconductors, and solar panels. There are many industrial metal uses, too, and the industrial uses for the metals mean they are part of our daily lives, even if you don’t realize it.

Precious Metals are Physical, Tangible Assets

Finally, precious metals are tangible, which means when owning precious metals, you have a physical item. Owning shares of a company or ETFs is really just a piece of paper or electronic item that doesn’t physically exist. There are things like gold focused mutual funds, but its not the same as owning gold in a physical form.

Though these benefits are great, and investor demand is high, investing in precious metals isn’t right for everyone. So, it’s important to make sure you are familiar with the different types of metals you can invest in, and familiarize yourself with different investment strategies that work for those who hold precious metals.

Types of Precious Metals That You Can Invest In

If you want to buy precious metals, you will generally find gold, silver, platinum, and palladium. Those are the most common. Here is a brief overview of each:

Gold

Gold is the most common rare metal for investors, and many people want to know how to invest in gold. According to the World Gold Council, in 2021, $130.9 billion worth of gold changed hands every day. As a metal, gold can be molded into a number of forms including bars, coins, rounds, and ingots. Many people also see gold as a status symbol, which is why it’s often found in jewelry.

The price volatility of gold is very attractive, and it holds up well against inflation. Gold hit an all-time high, as of the time of writing, on April 22, 2025, which shows that economic factors and a shaky global economy often affect price movements.

Silver

Like gold, silver prices tend to act in a similar manner and it has the same investment characteristics as gold. In 2011, silver hit the highest price, but that doesn’t meant silver isn’t a good investment.

Silver is used in many applications, and as silver prices continue to rise, overall, past performance can be a great indicator of future results.

As a direct investment, silver can be a good option as, like gold, it’s fairly solid during economic downturns, and it can help to generate income when the world economy is flailing.

Platinum

Gold and silver are more common for investment purposes, but platinum is also a solid investment option. Platinum is bought and sold on the market, but it’s much rarer than silver or gold. Platinum is often used in making semiconductors, and it’s becoming more common in the jewelry industry.

One thing to keep in mind about platinum, too, is that the price can be more volatile than silver and gold prices. Also, most of the platinum in the world comes from either Canada or South Africa. This means that sourcing platinum may be more difficult and susceptible to geopolitical issues.

Palladium

Finally, we have palladium. This metal isn’t as well-known outside of the precious metals investment circles. However, that doesn’t mean that it’s not a good investment. The best known use of palladium is in catalytic converters, and it hit a high in March 2022. Since, the price has come down, but it’s still used in many ways including in jewelry, fuel cells, the computer industry, groundwater treatment, and in dental fillings.

As with platinum, there are only two countries that produce the world’s supply of palladium: Russia and South Africa. Political developments can always change the price of these metals.

Investing in Precious Metals

Do you think you might be ready to invest in precious metals? There are many ways you can do this, including the following:

Metal Bullion: Bars, Ingots, Rounds, and Coins

The most common way to own precious metals is by buying physical bullion. These are physical precious metals that can be held and touched, and the value of the metals will vary based on the type of metal, it’s age, and it’s weight.

Before purchasing metals, you should research how to buy these items, and you should make sure you are buying from a reputable seller. Also, you will need to consider where you will store your metal, whether in a safe or a safety deposit box, and insuring physical gold and other precious metals can be expensive.

Non-Physical Metal Investing

To add more diversity to your portfolio, you can invest in non physical investment products that are highly connected to those metals. For instance, mining company stocks, gold mutual funds, or precious metals certificates are all ways to invest without taking physical possession of the metals.

This is a good option for those who understand and are experienced in the traditional stock and bond markets. These items can be bought and sold like stocks and mutual funds. These options continue to gain exposure as more people want to invest in metals, but they might not want to actually hold the physical metals and pay storage and insurance costs.

Exchange-Traded Funds (ETFs)

ETFs are another option for those who want to invest in precious metals. These are securities where many investors pool their money into funds that own assets including currency, stocks, bonds, futures, and precious metals. For precious metals ETFs, the funds can include holding physical metal, plus they can include mining supply shares, production company shares, and more.

Futures

As with most commodities, many people also invest in metal futures. Basically, when a person invests in a future, they agree to purchase an asset, in this case, a precious metal, at a specific price at a future date. Investing in futures can be lucrative, but these are also very high-risk. I don’t recommend dabbling in futures contracts to beginners, but it is a way to invest in precious metals, so I wanted to include it.

Precious Metals IRAs

More and more people are diversifying their regular IRA by adding money to their future retirement with precious metals IRAs. A precious metals IRA is similar to a regular IRA, but it is self-directed. This means that you get to choose what it held in the account. A regular IRA is typically made up of paper assets like stocks, bonds, and mutual funds. A precious metals IRA is made up of physical precious metals that you choose yourself, or with the help of an advisor.  We made a full guide explaining how a precious metals IRA works.

Precious metals IRAs are a good choice for those who are concerned with too much volatility in their retirement account. Precious metals prices are historically very stabile investments, and they tend to grow in value over time.

This is a long term investment, and you must hold the IRA account for a minimum of five years before you can take any withdrawals, and like most IRAs, you must wait until you are at retirement age, 59 1/2, to take a withdrawal without penalty. When you do finally take a withdrawal, you can take it in cash or in-kind, which means you get the actual metals shipped to you.

>> Learn more about precious metals IRA rules.

Price Concerns With Precious Metals

One of the things that investors must keep in mind about precious metals is that they can be vulnerable to price volatility, even though, in general, they are fairly solid and safe when compared to other investments.

Before you decide to add precious metals to your portfolio, consider the following:

Availability of the Metals

Precious metals are a physical asset, but it is not regenerated. What is there is there, and there won’t be anymore. All of these metals must be extracted and mined, and then treated, tested, shipped, and molded. This process, plus the availability of the metals, can affect the price.

Natural Events

Metals for precious metals investing are mined from the Earth. So, if a natural event occurs, the prices can rise or fall. For instance, if an earthquake occurs in an area where a huge gold mine is, and the mine is damaged, it can affect pricing. Other natural disasters, such as hurricanes, can also cause issues, as it could slow shipments and delivery of the metals to sellers. This can also affect the price of the metals.

Politics

Since some of these metals are only mined in certain countries, geopolitical issues can affect the price because there is only a limited supply available. Things like wars, political unrest, and shifts in leadership in certain countries can all affect the precious metals market.

Market Volatility

As with all commodities, precious metals can be impacted by swings in the market. Changes in price can happen very quickly, from day to day and even from hour to hour. This can impact your investment into metals, even if you are investing in stocks, futures, or IRAs.

New Technology

As I mentioned, precious metals are used in a variety of applications, and they can become more or less valuable as new technology is introduced to the world. If automotive engineers, for instance, find a more effective alternative to palladium when building catalytic converters, the price of palladium may fall. This can apply to any metal, as all of them have industrial applications that could certainly change in the future.

Despite all of these vulnerabilities, precious metals are still seen as one of the most safe and stable investments when compared to stocks, bonds, mutual funds, and other commodities. This is particularly the case when looking at long-term value.

Investing in Precious Metals – The Benefits

There are some key benefits to investing in precious metals that investors should also consider when determining if investing directly into metals is right for them.

Metals are Easy to Purchase

If you know how to buy a shirt from a website, you can buy precious metals. There are plenty of places to buy precious metals online, including well known retailers like WalMart. The thing that you really need to consider when buying these metals is that almost all sellers will add an up-charge. So, you need to make sure that you understand the spot price isn’t the price you will pay. This is how companies involved in the precious metals industry make money.

You Don’t Need a Lot of Money to Invest

You don’t need to spend a lot of money to invest in gold, silver, or other precious metals. In fact, you can start investing with just a few dollars if you want. You can buy physical gold or other metals, of course, but you can also purchase mining stocks that support the precious metals industry, open a gold IRA, or even purchase jewelry as an investment.

These Investments are Quite Stable

Currently, there are many uses for gold, silver, palladium, and platinum, and these are growing all of the time. Precious metals investors see metals as a safer investment than other investments, and history has shown us that precious metals perform well in shaky economies, and they are quite stable when used as a long term investment.

Precious Metals Bring Diversity to Your Investment Portfolio

Finally, adding precious metals to your investment portfolio is a good way to diversify your holdings. By having all different types of investments in your portfolio means that you can better offset any losses. In other words, if you have stocks, bonds, precious metals and other asset classes in your portfolio, and the stock market crashes, the precious metals can offset those losses.

It’s very important, as with any financial decision, to consider all of the pros and cons of precious metals before investing.

FAQs About Investing in Precious Metals

For beginners, which precious metal is the best?

Gold is the most common precious metal, and it is a good investment option for those who are new to investing in metals. You can invest in physical gold, gold stocks, gold-leveraged ETFs, gold IRAs, and gold futures. When we look at history, it shows us that gold has long-term value and has a better trading volume than other metals.

Is investing in precious metals a good investment?

Precious metals, specifically gold, tend to hold value over time. Many investors choose precious metals investments as a store of value, especially during times with a lot of economic downturns. Are precious metals right for you? It depends on your investment goals, preferences, and other factors. Additionally, diversification is important, so even putting all of your money into gold, for instance, might not be a good idea. Instead, choose other precious metals or other commodities to invest in as well.

How much is the investment into precious metals?

The amount you choose to invest in precious metals is up to you. I always suggest that people consider both their short and long-term investments goals, and then consider how much you can invest. Oftentimes, for beginners, it’s best to start small, and then build up your portfolio over time.

Are You Ready to Invest in Precious Metals?

if you are ready to invest and build a portfolio, precious metals are a great option. Precious metals can be very valuable, and with the right strategy, investing in metals can be very lucrative.

People who are new to investing must understand the types of metals that you can invest in, and how you go about investing in each of them. I also recommend that you thoroughly understand both the benefits and risks of each method.