Apocalypse Maybe: 4 Reasons You Should Invest in Precious Metals

In the year 1265, one ounce of gold was worth about £675 (adjusted for inflation). Most European gold was imported from the West African Sahara, where it was dispatched on the backs of camels, mules and donkeys. At that time, the shining, corrosion-resistant metal was used to coat the hands and numbers of clock towers throughout Europe, as well as to create jewelry and tableware for the wealthy classes.

Fast forward to 2016: that same ounce of gold is worth just over £1016. Gold’s primary use is in the jewelry industry, where rings, bracelets, necklaces, earrings, and all manner of wearable, non-tarnishing ornaments are made from it.

In addition to jewelry and decorative homewares, gold is now used to make a variety of coins for collection and investment purposes. It is also widely used in the manufacturing of computers, cell phones, calculators and other electronic devices. There is even gold used inside machines that travel through outer space and explore other planets.

Your Basic Precious Metals

Silver, at a current value of £14.72 per ounce, is noticeably less valuable than gold. It is, however, another precious metal with a steady market value and high usability in both the electronics and jewelry industries.

Platinum and palladium, at $1,094 and $690 per ounce respectively, are new to the precious metals market, historically speaking. Though they are not as in-demand for jewelry-making as their gold and silver counterparts, they are incredibly important for manufacturing and new technologies like water purification and fuel cell creation.

What makes these metals so precious? It’s the fact that they only have a limited amount available in the world. For example, though there were 1.5 billion metric tons of crude steel produced in 2011, only 2,660 metric tons of gold were produced in the same year.

4 Reasons to Invest in Precious Metals

1. To diversify and balance your investment portfolio.
2. To protect yourself against extreme currency devaluation.
3. To keep liquid assets in your portfolio.
4. To invest in future technologies.

World-Ending Scenarios in Which You Are Saved by Precious Metal

The ubiquitous reason investment advisors and professionals will give you about investing in gold, silver, platinum and palladium is this: to diversify your investments.

The fundamental reason for this is simple: When one type of investment sinks, another will rise. A balanced approach to investing will keep your portfolio healthy in times of crisis.

So why precious metals, specifically? It’s not just to balance out your portfolio; it’s to effectively hedge your bets. Since gold and silver have kept their high value for thousands of years, it is safe to say that they will continue to do so through war, famine and any epic civilization-ending events. While our current technology requires not only gold and silver but platinum and palladium as well, they are also considered very safe bets for investors.

Proponents of precious metal investments believe that in an event where local and international currencies are drastically devalued, physical stocks of gold, silver and the like will protect investors from losing everything. As they were once our first form of currency, many argue that they may be once again.

Precious Metals Needn’t Be Currency to Be Valuable

Not everyone invests in precious metals the same way. Where one person may decide to collect gold bullion (commonly called gold bars), another may buy stock in a gold-mining company. Still, another might buy stock in a company that manufactures gold-mining machinery. All of these investments are directly affected by the value of gold itself, and they are sound ways to diversify your portfolio.

Aside from the possibility that precious metals can function as a backup currency, there is another reason to invest in any of the ways mentioned above: bullion and gold-derived stocks are easy to sell quickly.

In the event of extreme currency devaluation or personal financial strain, you should be able to turn to your investment portfolio and liquidate valuable assets in return for cash (in any currency). Keeping precious metals in your portfolio is a great way to make sure that liquidation is possible at all times.

New Precious Metals May yet Rise in Value

It’s no secret that despite the historical significance of silver and gold, palladium and platinum have even more to offer in terms of technological advancement. In full knowledge of these metals’ potential, Russia announced in late 2015 that it would be cutting exports of palladium in coming years.

For the international market, this means an upcoming shortage and a sharp increase in value. As technologies that depend on platinum and palladium advance, the value of these commodities can be expected to rise, challenging gold as the most valuable of the metals.

Sink or Swim, Precious Metals Are a Good Investment

Before buying precious metals, do your own research. If you decide to buy coins or bullion, you will need a safe place to store them. Storage fees and facilities cost extra money, whereas stocks do not.

Precious metals in any form are a strong investment not only due to their historical popularity and use as currency but also because of the ways they will help to shape our technological future.

Whether civilization as you know it burns to the ground or not, you can probably bet that gold, silver, platinum and palladium are going to be an important part of the future.