Precious metals are a classification of metals that are deemed to be rare and highly valued. A variety of factors drive up the value of precious metals, from their rarity, to supply and demand issues based on their industrial applications and use as investment vehicles. They are commonly traded by both new and experienced investors.
There are many advantages of investing in precious metals for trading, as they can be used to diversify a portfolio and hedge against inflation during times of economic uncertainty. Understanding what precious metals are, how they are used and factors affecting their price is important to build up a strong trading plan.
The Different Precious Metals
The most popular precious metals are gold, silver, platinum and palladium:
- Gold: Used as a standard form of currency throughout history, it is used in jewellery, electronics and engineering. Traditionally a safe haven investment in times of economic volatility.
- Silver: Not as valuable as gold but used in the electronics, technology and jewellery industries.
- Platinum: Incredibly rare with only a few hundred tons mined each year, its first known use was in the 1500s. Now it is used in the automotive, electronics and other sectors.
There are other different precious metals that are popular with investors but only really used in industrial applications. These precious metals for trading and industrial use include palladium, which is used in electronics and chemical applications, and iridium, used in speciality alloys.
What are Precious Metals Used for?
Precious metals are used for three main purposes for the different precious metals. They are used in industrial applications, as jewellery and as a currency or investment. Demand for specific precious metals can change depending on production levels in the technology, electronics, engineering and automotive sectors, along with the economic climate.
This can affect precious metals for trading purposes, as an increased demand will boost their value, especially as there is a finite amount of all the different precious metals available. With precious metals for trading, they can be physically bought, owned and sold or traded.
Open an Account to Trade Precious Metals
Open an account with Equiti to start trading some of these different precious metals. Take advantage of our excellent prices and trade on the live market or open a demo account to practice trading any of the different precious metals first.