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Investing in Precious Metals

Precious metals are rare metals that have high economic value. They're valuable because they're scarce, useful for industrial processes, or have investment properties that make them a good store of value. Notable precious metals include gold, silver, platinum, and palladium.

Gold is the most well-known and investable precious metal. It's unique for its durability (it doesn't corrode), shaping capability, and ability to conduct heat and electricity. While it has some industrial uses in dentistry and electronics, it's primarily used to make jewelry or as a form of currency. It has long been a store of value. Because of that, investors seek it out during times of economic or political turbulence and as a hedge against rising inflation.

Adding precious metals bullion, coins and bars to an investment portfolio can provide diversification and can act as a hedge against inflation. We offer competitive pricing that is driven by market rates and quoted in Canadian or US dollars1. In addition to owning physical precious metals, you can also buy precious metal certificates2; this allows you to own gold or silver without taking possession of physical bullion, coins or bars.

Protection of capital from inflation. This is especially true at a time when interest rates in many parts of the world are zero or negative and central banks and governments are increasing the money supply through their stimulus programs.
Global central banks are able to buy unprecedented amounts of gold and more. In each of the last 10 years (2010-2020), central banks have been net buyers. Demand from major players, such as central banks, can definitely support the price.
Hedging against multiple economic and political risks such as economic collapse, military and trade conflicts, natural disasters, global pandemic, etc.
Opportunities for capital gains when the price of the precious metals you have invested in increases.
Opportunities to diversify a portfolio of assets such as stocks, bonds, bank deposits, etc., due to an inverse or lack of a correlation with these assets.
High liquidity, which means that you can quickly and easily buy/sell your investment at a low cost (this is important mainly for online investing in gold and precious metals).

Now, investors also have the ability to invest in precious metals according to environmental, social and governance (ESG) standards and values, as companies bring these principles to the forefront and strive towards a greener future.

Investing in precious metals - What does the price depend on?

Precious metal prices are important not only for producers and end users. They have long been used as a tool to monitor economic and market conditions. But, what they depend on, we are going to see here:

Higher demand and expectations for higher demand in the future raise metal prices and vice versa.

As precious metals are traded in the US dollar, the weakness of the dollar can lead to a rise in the price of precious metals. Respectively, a strong dollar can affect the prices of precious metals.

The lower the interest rates and the looser the policies of major central banks around the world, higher prices of precious metals can be expected due to potential inflation and lower yields on other assets such as bonds. The opposite is also true.

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Investing in Precious Metals

Investing in precious metals - What does the price depend on?

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