Australia boasts the largest gold reserves, and second most productive gold mines in the world ranking behind only China. All in all the mining industry makes up over half of Australia’s export income, netting us over $121 billion dollars an year.
While manufacturers and construction firms have been quick to take advantage of the lucrative opportunities offered by precious metals in the country; mainstream investors have only recently, begun to realize how much they stand to gain from adding physical assets like gold, silver and platinum to their portfolios. These substances add security, stability and much-needed diversification to any investment mix, but before you dive in, it pays to know the market.
Here are a few key things you should know.
You Have Options
While gold and silver are by far the most popular choices for investment due to their relative price stability and the intrinsic trading value they’ve held for thousands of years. There are other precious metals such as rhodium, platinum, and palladium that you can purchase as well.
While gold has some industrial uses, the vast majority of physical gold stock is hoarded due to its traditional function as legal tender, as well as the physical properties of the substance. Because its price is often only tenuously linked to supply and demand, it is considered a frontline investment for hedging against inflation, financial instability and geopolitical concerns.
Other commodities such as silver and platinum retain their intrinsic value partly due to their relative scarcity, but more prominently due to their importance in manufacturing. Because of this, you may find the prices of these materials to be more volatile. Generally rising as industrial demand grows or economic crises threaten, and falling in boom times when supply is strong.
Make Sure You Buy From a Reputable Vendor
Make sure to avoid unscrupulous sellers that advertise substandard or even counterfeit bullion at suspiciously low prices. In Australia reputable dealers like http://www.goldstackers.com.au/store/, are the only places you should purchase from.
You Need to Store It
If you’re purchasing a store of smaller bars, or coins then you can feel relatively secure keeping them at home in a locked deposit box; but if you’re buying in larger weights or quantities then you might want to consider having them stored at an independent depository. Either way you should insure your physical assets against loss or theft check with your vendor for possible insurance providers.
Understand What Kind of an Investor You Are
Are you looking to use your investment in precious material as a hedge against losses in other areas of your stock market portfolio? Are you looking for a long-term investment that holds its value? Are you looking for a liquid investment that you can sell off easily if needed? Are you looking to invest, in order to accumulate profits?
The answers to these questions will determine which type of metal you purchase. For a long-term investment nothing beats gold bullion, if you’re seeking a hedge then you’re better of steering clear of silver, although both gold and silver are very liquid commodities. While Rarer metals like platinum and palladium may be a better choice if you’re looking to make a short-term profit.