The Gold and Silver of Precious Metals Investments


Of the options in precious metals investments, gold and silver are the two most advertised and first two considered in most investment portfolios, almost as if platinum and palladium were upstarts with penny-stock investors.  This is wrong, by the way; the spot price of platinum in particular is not much less than gold, although much more volatile.  Palladium, also volatile, is about half of gold.  It is silver that brings up the economy brand if there is such a thing.  However, ignoring the two P’s in the precious metals investments pod, consideration of gold and silver as an investment option would be highly improbable to ignore.

If Rip Van Investor had been asleep the last twenty years and just awakened sitting in front of his HDTV (somehow delivered and installed during his long nap) and was confronted with repeated ads selling gold and silver bullion coins and bars, he might think the market had dropped out of sight in every other commodity.  No, interspersed there are ads for cars, soda, diet foods, pharmaceuticals (one must ask the doctor what they do, but risk of death is always mentioned!), but gold and silver (which seem to carry no risk at all) are the products of choice on television.  He easily remembers that his wedding ring is gold, and, if memory serves, it was a gold ring he gave his wife at the altar, but he never really thought about gold as an investment strategy.  If Rip has become Internet literate since his awakening, he will see gold and silver rise to the top of pop-up ads, so precious metals investments must really be hot.

Then the TV pitchman says, nonchalant, that gold is fourteen hundred an ounce.  U.S. dollars?  Rip pulls the ring from his finger.  It’s huge; it must weigh a ton, he thinks, but it does not tip the bathroom scale.  Still, he thinks in investment terms, only what would be exchanged for 1,400 bucks.  Wrong thinking.

Gold or Silver, or Both Precious Metals Investments

Rip is not dumb, just sleepy, but he has had enough prompts from TV and the Internet to call his broker (still in business after 20 years; must be a good guy) to find that his antiquated investments, unfortunately none in precious metals, have made money, but his broker mirrors the ads; he should take some of his portfolio and put it in gold and silver right now.

Gold, Rip is told, is the safest commodity for precious metals investments ever conceived.  Since about 5000 B.C., or earlier, it has never been without value.  Just pulled out of the ground, it is liquidible, but once made into coins, bars, jewelry and thousands of manufactured goods, its value heightens almost without respect to the stock market.  In fact, of all the precious metals, gold’s value is independent of supply and demand.  Of all precious metals investments, it is safest as a protector against inflation (although silver shares this benefit).

Silver is attractive as another of the precious metals investments because it, too, is mined for bullion, bars, jewelry and manufacturing.  Silver’s low price; about $30 per ounce, makes it easy for even a small investor, who can push disposable investment cash, or convert other investments into silver and procure a large volume of it for a decent price compared to gold.  Silver is more volatile than gold, but its track record has never seen its value drop to zero, thus making it a good hedge against inflation.  Both gold and silver represent valuable precious metals investments.  If Rip can sleep again, it will be blissful.