Investing in metals has long been a popular choice for individuals looking to diversify their portfolios and hedge against economic uncertainties. Metals such as gold, silver, platinum, and palladium are considered safe-haven assets due to their intrinsic value and limited supply.
Investing in metals can be done through various avenues, including buying physical bullion, investing in exchange-traded funds (ETFs) that track metal prices, or purchasing mining stocks. Each option has its own set of risks and rewards, so it’s important for investors to carefully evaluate their investment goals and risk tolerance before diving into the metal market.
Let's find out what are the best metals to invest in.
- 5 Best Metals to Invest In
- 1. Gold
- 2. Silver
- See All 10 Items
5 Best Metals to Invest In
Benzinga explores two categories of metals: precious metals and industrial metals. Investors throughout the centuries have been buying precious metals like gold and silver, but investments in industrial metals like copper can also be profitable.
1. Gold
Investing in gold is a strategic move that can help safeguard your wealth despite economic uncertainties. Gold has been valued for millennia, and its worth as an investment continues to shine.
The price of gold tends to rise during economic downturns, which is why gold can provide an effective hedge against inflation. Since gold is a tangible asset, it also offers investors a heightened sense of security.
Pros
- Retains value even during inflation
- Consistent global demand
- Provides portfolio diversification, which reduces overall risk
Cons
- Requires secure storage, which can be costly
- Doesn’t generate dividends or interest, unlike stocks and bonds
- A slower and more cumbersome sales process
2. Silver
Many have referred to silver as poor man’s gold, but this nickname doesn’t do justice to how beneficial it can be to add silver to your portfolio.
Silver’s value comes partially from its rarity, but it is also used extensively in industrial applications, like medical devices, electronics and solar panels. These unique attributes as both a precious and industrial metal mean that silver’s value can benefit from economic growth and serve as a hedge during economic downturns.
Pros
- More affordable than gold and thus accessible to a wider range of investors
- High industrial demand, which makes it a stronger investment
- More volatile price than gold, which means it can offer higher returns in certain markets compared to gold
Cons
- May not be a suitable option for risk-averse investors
- More sensitive to economic downturns
- Potentially higher returns with other investments
3. Rhodium
Rhodium is a lesser-known precious metal that is rarer than gold or platinum. It’s generally used in the automotive industry in objects like catalytic converters, where it helps reduce harmful emissions.
Investing in rhodium is an unconventional way to diversify your portfolio with a high-value metal that has major industrial demand. But if you’re going to invest in this metal, it’s important to note that because of its rarity and specialized use, it can be a riskier option than traditional precious metals like silver and gold.
Pros
- Extremely rare, which can drive up its value
- Has experienced significant price increases in the past, which could indicate higher returns for investors
- High industrial demand, which could make it a stable investment opportunity
Cons
- Volatile and unpredictable price
- Higher entry costs compared to other metals like silver and gold
- Less-developed market, which impedes the buying and selling process
4. Platinum
Platinum is a precious white metal with unique properties, like exceptional conductivity and a high melting point. It is used in many industries, from jewelry making to specialized chemical uses to medical device manufacturing.
In addition, platinum is a key component in creating fuel cells used for clean energy applications. As the world’s largest economies transition to cleaner energy, the demand for platinum could rise significantly.
Pros
- High prices from supply constraints
- High future demand could make platinum a wise investment now
- An increasing number of platinum-based investment products may indicate growth
Cons
- Price volatility from constraints on supply and extraction
- Much of the platinum in use is recycled, which can have an impact on supply constraints
- Heavily diesel-dependent, with declining diesel vehicle demand
5. Copper
Copper is an industrial metal used in a variety of applications, from construction to electrical wiring and electronics. The demand for copper is surging because of a global shift toward renewable energy and electric vehicles.
Investing in copper could be a strategic move at this point, especially if you want to capitalize on global infrastructure development and the green energy revolution.
Pros
- Copper prices tend to reflect the health of the economy, so investing in copper can be a good way to bet on economic growth
- Demand for copper is on the rise as developing countries are investing in building infrastructure
- The demand for copper is unlikely to cease because of its excellent electrical conductivity properties
Cons
- A downturn in the economy can have an impact on demand and prices for copper
- Copper is susceptible to being replaced by aluminum if there’s not enough supply
- Storing and handling physical copper investments can be inconvenient and costly
Are Metals a Good Investment?
Metals, especially precious ones, tend to be good investments, especially in times of economic uncertainty. Their intrinsic value does not tend to diminish over time, unlike less tangible assets.
However, like other investments, metals come with their own risks. Precious metals like gold and silver may be less likely to lose value, but their prices can be volatile in the short term. Industrial metals like copper are highly dependent on economic activity.
When you devise an investment strategy, you should consider how investing in metals can support diversification. You might also consider a combination of precious and industrial metal investments to help mitigate risks.
Precious metals don’t have interest rates, unlike bonds or savings accounts. When you’re investing in physical precious metals, you’re buying a tangible asset — one whose value is vulnerable to market forces.
But even though metals don’t pay interest or dividends, interest rates can still indirectly affect metal prices. When interest rates are high for other investments, the demand for assets like precious and industrial metals tends to increase.
Invest in Metals with These Top Online Brokers
If you’re ready to add metals to your investment portfolio, the first step is to explore top online brokers. Online brokers offer an accessible and efficient way for you to discover the best metals to invest in without accounting for physical storage for your metals.
- Best For:Gold IRAs with On Going PromotionsVIEW PROS & CONS:securely through American Hartford Gold's website
- Best For:Precious Metals and CoinsVIEW PROS & CONS:securely through Priority Gold's website
Best Metals to Invest In? It Depends on Your Goals
Investing in metals can be a lucrative venture that stabilizes your overall portfolio. The types of metals you should invest in will depend on your goals and your risk appetite. Whether you’re drawn to gold or copper, understanding the market of precious and industrial metals and diversifying your investments is key to being a savvy investor.
Frequently Asked Questions
What is the best metal to invest in right now?
Which metals will increase in value?
Which metal is in high demand?
One metal that is currently in high demand across various industries is lithium. As the primary component in rechargeable batteries, lithium has seen a surge in demand due to the increasing popularity of electric vehicles and the growing market for renewable energy storage solutions. This has led to a significant rise in lithium prices and investments in lithium mining projects worldwide.