Since the dawn of time, man has recognised the intrinsic value of metals. Ancient civilisations used them as currency, ornamentation, and symbols of wealth and power. They became inherently linked with the rich and the influential, and in this sense, their role in society is little changed to this day.
However, in today’s society, metals not only have a tangible value, but also play their part as an investment tool. The metals market is traded by a vast number of people, all with one singular, shared goal: to turn a profit.
But what is it that makes these investors choose the glitter of gold and silver over the safety of bonds, the thrill of forex, or the fast-paced world of stocks and shares? There are a thousand different answers we could give you, but here are just three of the replies that might appeal to you.
Metals Protect Against Inflation
In recent years, metals have seen a renewed surge in their popularity, and this has largely been driven by the economic turmoil that has seized the globe. This follows a pattern that has dominated the metals market for decades, with investors always turning to gold and its sister metals when disaster strikes. The reason for this is simple: metals hold their intrinsic value. They represent a safe haven, a buffer against inflation for those whose portfolios so desperately need it. According to Forbes:
“To many people in this uncertain environment, buying metals represents a safe haven approach to diversification and a partial hedge against equities.”
This argument perfectly leads on to our second point…
Metals are a Wonderful Tool for Diversification
The best way to protect yourself against ruin in the world of trading is by maintaining a diverse portfolio. It is a rare investor who would disagree with this statement, and an even rarer one that would not put this rule into practice. The idea is to create a portfolio that’s balanced, with lots of different asset classes and investment types represented within it. Such a portfolio is much better protected than one specialising in a single area if disaster strikes, as the likelihood is that should one market be hit by chaos, at least part of your portfolio will retain its value. Thanks to their resistance to inflation and deflation, and their relative stability, metals are ideally suited to such diversification purposes.
The Metals Market Offers a Great Deal of Choice
Another factor that often appeals to investors is the amount of choice that the metals market offers. Although most of us think of gold and silver when we visual it, platinum, palladium, copper, lead, tin, nickel, and a whole host of other options can also be invested in. These are driven and influenced by a diverse range of factors, meaning that you can choose the assets that best complement the rest of your portfolio, your specialisms, and your approach to risk.
Could metals offer an ideal investment opportunity for you?
