When people talk about precious metals, do you always think of gold or silver? Does it make you excited? These precious metals are both important for our material and spiritual life, they are very attractive to us. Gold, silver, platinum and palladium constitute the majority of trading in precious metals. Today we’re going to talk about the advantages of precious metals investing.
- Precious metals bullion is highly liquid; it trades twenty-four hours a day, seven days a week. Bullion held in certificates or in ETFs, where liquidity is dependent on the market rather than the bullion itself, should be avoided.
- Deep liquidity and high volatility mean positions may be easily opened and plenty of opportunities abound whether gold’s price is rising or falling.
- Investing in precious metals represents an opportunity for investors and traders to diversify their financial holdings to ensure they are at least partially represented on the haven. In an era of uncertainty, safe-haven tends to work opposite equities, and hence can be viewed as a hedging opportunity not just against inflationary tendencies, but also against riskier assets.
- As an investment product, the value of gold is relatively stable, so it is often used as a hedging tool. According to the record, the performance of the gold price is always opposite to the stock market. When faced with huge economic fluctuations, the stock market and other investments are more fierce in a short time. Only small waves are magnified infinitely. When the market is in a landslide, people tend to buy gold to avoid financial risks, so the price of gold rises.
- Unlike luxury goods, houses and lands, whose value declines due to the influence of time, politics, local economy and other elements, precious metals cannot be shaken by the abrupt change of place at any time.
- When trading precious metals, the profit and loss of each transaction are equal to the trade margin in two opposite directions in the contract. The gold contract transaction only takes 1% of the transaction amount as the investment cost of the deposit, that is to say, only little investment expense has greater leverage, and a small amount of funds promotes the bulk transaction.
- The precious metals market belongs to the global market, and no individual or consortium has enough capital to manipulate the market. The price of precious metals is globally uniform, and no dealer’s quotation dare deviate from the actual range because once the deviated price is reported, there will be a large number of investors in the world to carry out risk-free arbitrage.
- Precious metals are non-renewable rare metals, the total amount has been mined more than half of the earth reserves, the future supply of precious metals will be less and less so that the price of precious metals always keep rising, even if there were fluctuations during past time, in the long period, the price of precious metals is still overall positive.