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Detailed Guide for Precious Metal Investment

gold bars

Many people have this idea that they have to spend months or enroll in expensive online courses to understand the dynamics behind metals like gold, silver, platinum, palladium, and more. They think that only then will they be able to formulate a strategy that leads to high returns. 

While that’s something that can certainly help, most people just don’t have the time to do this. Most investors are white-collar Americans who already have tough jobs and try to hustle on the side by investing their savings.  

If you identify with this, you need to relax and realize that you won’t become the Warren Buffet of precious metals in a month. You have to be patient and keep increasing your knowledge over a longer period. This blog post will help people start their journey to diversify their portfolios. It will walk them through the process of investing in precious metals, such as what factors to look out for, and how to buy and store these precious metals.

A person searching for a precious metals dealer online to open an IRA account.

Benefits of Investing in Precious Metals

Precious metals are a more stable investment than other forms of investing and allow investors to diversify their portfolios. Precious metals markets are less volatile than other types of investments, so you can feel more confident that the value of the funds you have worked so hard to build will not evaporate overnight. These metals are a proven store of value that tend to appreciate over time which doesn’t let inflation eat up their purchasing power.

People have to go back to buying them whenever an economic downturn occurs. Unlike paper money, these metals came from real mines and were used as coinage in the not-so-distant past. They are an excellent hedge against inflation and present high opportunities for capital gain when volatility is high.

Factors that Affect the Price

Economic Volatility

To understand how the precious market will perform, you need to look at the current volatility in the market and other competing asset classes. Financial newspapers and investment blogs are a great way to start analyzing what’s happening. 

For instance, consumer spending has dipped, and people aren’t spending as they used to because of high inflation. This has led to a stock sell-off in which investors are selling their stocks as rumors grow of a major recession similar to the one in 2008. What’s more surprising is that the bonds market isn’t performing well either.

As the Federal Reserve raised interest rates to counter inflation, this led to the worst performance for the bond market since 1949. Analysts predict that the bond market performance spells further trouble for long private equity trades, US technology stocks, and the US dollar. Even the high-flying crypto market has been extremely volatile, with the price of bitcoin down by a mammoth 60% this year alone. Other coins are performing even worse, and many coin exchanges have gone bankrupt.

The key to better investing is recognizing these signs of volatility before everyone does. This will help you liquidate your holdings faster and diversify your portfolio in more stable assets such as precious metals more efficiently.

Supply Factors

It’s important to remember that precious metals are limited in supply as they are extracted from mines across the planet. For example, platinum, rhodium, and palladium are mainly extracted from Russian and South African mines. This is why you need to look at mining operations and see if the supply chain will stay stable or if bottlenecks that can affect the demand will emerge.  

The pandemic led to several mines closing due to labor shortages and port closure. This led to the prices of metals such as platinum skyrocketing. Similarly, geopolitical factors can affect the price as well. When Russia invaded Ukraine, the prices of metals like palladium rose because of international sanctions on the country.

Stacks of gold bars

Industrial and Consumer Demand

Diversified industries across the world use these metals to manufacture products. The auto sector uses platinum group metals to build autocatalytic converters. The pharmaceutical sector uses silver in medical formulations. Similarly, gold is demanded by jewelry companies to meet the needs of their customers. 

To build a good investment strategy, you need to understand each metal’s specific characteristics to identify its uses and keep track of its statistics. 

How to Buy and Store Your Metal

You can invest in precious metals by purchasing physical bullion bars and coins from reliable metal exchanges. Try to find an exchange that is certified by organizations such as and enjoys a good reputation among precious metal investors. These exchanges can give insured delivery to your home’s locker or a commercial depository of your choosing. 

If you want to take advantage of the tax relief you get with traditional IRAs, you could also invest in a precious metals IRA. This will allow your pre-tax funds invested in precious metals to grow without getting taxed until you decide to withdraw them. If you find these IRAs to be confusing, then all you have to do is find an exchange that has an in-house IRA department that can explain the process of setting up precious metals IRAs.

A woman holding gold coins

Select an Affordable Precious Metal Exchange

On the lookout for a reputable precious metals investment dealer that is accredited with BBB? At Orion Metal Exchange, we enjoy a 4.9 rating on Trustpilot and deliver high-quality gold, silver, palladium, platinum bullion, and coins. This helps our clients stay clear of fraud. We charge no fees when buying back precious metals. This improves liquidity for our clients. We also help with insured delivery and precious metal storage options. 

Get in touch with us now to learn more about our services.

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