Investing in Precious Metals

1.28.22 - Prepare for Unsettling Tightening Cycle

Gold last traded at $1,787 an ounce. Silver at $22.30 an ounce.

NEWS SUMMARY: Precious metal prices declined for a third day on Friday despite rising inflation and a flat dollar. U.S. stocks traded mostly lower - despite upbeat Apple earnings - to end a roller-coaster week with the S&P 500 headed for its worst month since March 2020.

Motley Fool--"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.

There are many ways to invest in gold. You can purchase physical gold coins, bars, or jewelry. Investors can also buy gold stocks (shares of gold mining, streaming, or royalty companies), gold-focused exchange-traded funds (ETFs), or gold-focused mutual funds. Each gold investment option has its pros and cons....

Silver is the second most-common precious metal. It's an important industrial metal used in the electrical, electronics, and photography industries. For example, because of its electrical properties, silver is a vital component in solar panels. Silver is also a store of value that's used to make jewelry, silverware, coins, and bars.

Silver's dual role as an industrial metal and store of value tends to make it more volatile than the price of gold...In some cases, silver prices can outperform gold during periods of high industrial and investor demand.

Precious metals provide several benefits to investors, including:

- A hedge against inflation: Precious metals prices tend to rise at or above the inflation rate.
- Tangible asset: Precious metals are real assets that hold value beyond investment purposes such as jewelry or industrial uses.
- It's a fairly liquid investment: You can quickly sell precious metals (especially investment products) and convert them to cash.
- Provides portfolio diversification: The price movements of precious metals don't always go in the same direction as the stock or bond markets."