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Investors buy gold, silver, and aluminum for their portfolios for two main reasons. One reason is to protect the value of their money. Precious metals hold their value compared to fiat currencies that do not. The other reason is to make trading gains from short-term movements in price. This article will discuss the three metals gold, silver, and aluminum and the reasons to invest in them. Consider these precious metals to be somewhat like a financial insurance policy. Do you ever ask what metal should I invest in?
Should I Invest In Gold?
Gold is the most well-known precious metal. Gold has held its value for many thousands of years compared to currencies that lose their value when countries end. Gold has industrial uses in dentistry, medicine, and electronics. Also, gold has an extremely long history of use in jewelry. Additionally, gold is used as money. Gold can be shaped into gold coins or bars called ingots. Gold is known for its durability and does not corrode or rust.
During recessions and depressions, gold holds its value well. Equities, bonds, and real estate can lose massive amounts of value during these economic periods. The instability of banks can cause large increases in the price of gold. The price of gold also increases during periods of political crisis. War can cause gold to increase in price as gold is portable. In times of war, families sometimes put a lot of their savings into gold to be able to move quickly. Gold can be used during times of inflation as it holds its economic value. Gold should be used to provide balance to your investment portfolio. If interest rates decrease, the price of gold generally increases because the cost to hold gold decreases.
Gold can be invested in through options and futures. Gold can also be invested in through ETFs. Additionally, you can invest in gold by investing in gold mining companies. You should check a gold price forecast in order to keep track of the pricing costs and general state of the market. It’s a good idea to check the pricing forecasts before making any final investment decisions too. The price of gold changes every second of the day.
Should I Invest In Silver?
Silver is the second most well-known precious metal. Similar to gold, silver has maintained its value over thousands of years. Silver is used more in the industry than gold. Silver is used often in electronics because of its thermal and electrical conductivity. Silver is also used in silverware and jewelry.
In terms of investment, you should know that silver has been in a bear market for 600 years. Every time that there is a new finding of silver ore, the price of silver drops. This fact does lead to some rare price instability in the price of silver. During the first decade of the century, silver prices increased rapidly. However, the price of silver has recently been moving in a negative direction.
The price of silver has more demand and supply constraints than gold. The price of silver has a positive correlation with the global economic business cycle because of the heavy industrial use of silver. The current expansion of U.S. infrastructure could lead to increases in the price of silver because of increased demand. The price of silver is also linked to interest rates. If interest rates rise, the cost of holding silver increases. The increasing cost to hold silver can lead to decreases in price.
Should I Invest In Aluminum?
The first production of pure aluminum was in 1827. Aluminum was difficult to extract from ore, so the price of aluminum was very high for a few decades. Aluminum was more expensive than gold for a few decades as well. For a few decades, aluminum was used in jewelry and dinnerware. After a couple of decades, Herman Deville found a way to isolate the precious metal. By 1884, an ounce of silver was at the same price as an ounce of silver.
In 1888, Hall built the first large-scale aluminum production facility. The large-scale production of aluminum caused aluminum’s price to permanently decrease. 1998 marked a high for aluminum at 9.5 cents/ounce. Aluminum is now one of the most used metals in the world. Aluminum can withstand corrosion and is very malleable. Aluminum is used in aerospace, vehicles, televisions, kitchen items, and power and transmission lines. The price of aluminum depends on industrial demand and supply. Deficits because of high amounts of industrial production lead to increases in the price of aluminum. Options and futures are a way to trade in aluminum.