Precious metals are separate entities from bonds, stocks, and other types of investments because of one simple fact: they are commodities. A commodity is any type of good that can be bought and sold. Examples of commodities include oil, copper, coffee, and gold. Commodities are not typically tied to the stock market, thus making them a good place for people to invest their money during times of economic uncertainty.
Investments in precious metals from the best gold companies provide their fair share of benefits, including portfolio diversification, and many want a slice of the pie. In fact, the rise in popularity of these precious metals has led to the creation of precious metal-backed digital currency, like Rhodium Coin.
If one decides to invest in these metals, it only makes sense that they put their money towards the best of the bunch.
Big names in the field
Each metal possesses its own unique characteristics concerning investments and the market. This creates a variety of ideal precious metals while at the same time making it difficult to designate one as the cream of the crop. The best – and most popular – ones can be narrowed down to four: gold, silver, platinum, and palladium.
Gold the most popular name of the metals, serving as a luxury item with practical applications. It is part of many electronic devices, some of which include cell phones, computers, and televisions. The price of gold per ounce is roughly $1,740, a decline from a $2,070 high in August 2020. This means that the price of gold investment might be a little steep for some investors.
Similar to gold, silver is seen as a safety net in times of uncertainty. Trading silver at approximately $26 per ounce makes it comparatively more affordable than gold. Moreover, silver has more practical applications, such as batteries, photography, and dental alloys.
Platinum is an expensive metal due to its scarcity. There is less of it available, especially in comparison to gold and silver. It is currently trading at about $1,220 per ounce, with the price increasing considerably during the past year. Most of the metal is mined in South Africa, and lockdowns courtesy of COVID-19 has influenced its output.
Not unlike a lot of precious metals, platinum has practical applications. It is not limited to jewelry, being a popular component in dental work, fire resistance, and electrical contacts.
Palladium is a precious metal similar to platinum, except it is rarer. Palladium is trading at around $2,380 per ounce, which currently makes it more expensive than gold. It experienced a slight dip during the first quarter of 2021, but its prices soared over 28% throughout 2020.
Palladium is a common component in the construction of catalytic converters, especially for cars that use gas rather than diesel. The metal is also used in jewelry, electronics, and dentistry. Since palladium’s price has climbed, catalytic converter robberies have also been on the rise because the precious metal can be stripped from them.
Cryptocurrencies are no stranger to fluctuations in exchange rates, and they are also infamous for high price volatility. To make crypto money more stable and useful, a new type of cryptocurrency was crafted: stablecoins.
The value of a stablecoin is tied to a valuable asset of some sort. This asset could be anything from fiat money to precious metals (ex. gold and silver) to even oil. It can basically be anything with tangible value. A stable cryptocurrency’s price is formed proportionally to the established asset.
The ideal stablecoin should be capable of performing three main functions:
A noteworthy stablecoin to consider investing in is the aforementioned Rhodium Coin. This is the first fractionalized asset backed by rhodium that is available for direct purchase with either cryptocurrency or national currencies. Its fractionalized nature means allows users to purchase any amount of Rhodium Coin they want to at any time.
By pegging their value to precious metals, stablecoins assure investors that they will receive the stability that is otherwise lacking in cryptocurrencies. A majority of these coins are backed by one of the four precious metals listed above, and for a good reason. They have been popular assets for many years and continue to be sought after by many investors and industries.