As an amateur investor, if you are thinking of investing in precious metals bullions, you need to first clear your basics before moving ahead. The world trade agencies advise people to be informed before taking any investment steps. Coming back to the title: gold, silver, and platinum bullions can be a great investment. People around the world have been investing in physical precious metals for years now, so there must be a good reason why you should too.
But first, you need to understand how bullions and gold, silver or platinum bars work.
Gold, silver and platinum bullions: Some characteristics
The physical form of all the precious metals comes under tangible assets that are mined from under the earth’s surface. Since the process to extract, refine and fabricate them is tedious and costly, their international prices are considerably high. Thus, gold, silver, and platinum bars have innate value and hold liquidity when turned into investment-grade bullion.
Today, all these precious metals are used in making jewellery and other luxury markets. They also have vital usage in technology and industry, used in making microprocessors, heavy equipment, etc. In the commercial investment market, these three metals hold valuable positions. Retail and institutional investors consistently trade them on futures markets and physical precious metals exchanges. On top of it, investors can invest in these metals as precious metals backed Exchange Traded Funds (ETFs).
Bullion bars and coins
When we talk about precious metal bullions, they are bulk quantities evaluated by weight and cast into bars and coins. You can buy gold, silver and platinum bullions from major dealers and banks easily. Since these banks are trusted entities with official licenses, you can trust their quality and value. However, it does not mean that you should simply walk into a dealer’s store and buy whatever they offer. Remember to always do your research and make a sensible decision before investing.
The world’s best precious metals refiners fabricate gold bars, silver bars, and platinum bars. Some of them are Swiss precious metals refiners like PAMP, Valcambi, Argor-Heraeus. You can find all these refiners on the LPPM and LBMA good delivery lists dedicated to refining investment precious metals.
Portfolio diversification
The constant price shifting of precious metals in the market means investment diversification is a major point across investment portfolios. According to experts, precious metal prices show a negative correlation with financial assets’ prices like bonds and stocks. There are several factors behind this correlation, like the trust in precious metals during a financial crisis. Also, any economic cycle has much less effect on precious metal prices in comparison to bonds and stocks.
During diversification, your allocation size relies on how much risk you want to take in your portfolio. If you want higher risk portfolios, you need higher precious metals allocations so that you can offset those risks.
Final take
How much you want to invest and the level of portfolio diversification depends on you. There are some investors who prefer one metal over the others, and hence, they make their investments depending on it. On the other hand, there are investors who hold diversification policy close to their heart and thus, invest in all the precious metal bullions depending on the market situation. You also need to consider the cost of entry and how much you understand a particular market. If you are looking to buy gold, silver, or platinum bars, you can do so from RPS Gold. With years of experience in dealing with precious metals, we guarantee total customer satisfaction through our work and product quality.
