There are three main precious metals which people choose to invest in, which are gold, silver and palladium.

You can roughly split precious metal investment into two brackets, and that is either physically buying a quantity, or investing in the price movements.

You might choose to invest in a stock that is tied to the value of a metal, or you might directly bet on these price movements. There are advantages and disadvantages to both, which are beyond the scope of this article; instead we will look at the pros and cons of investing in precious metals as a whole. As you will see, there are considerable arguments for and against.

Advantages Of Investing

Precious metals are a physical commodity in that they actually exist. If you purchase a metal, even if you never see it, somewhere in the world is a quantity of it that actually belongs to you. Many people actually like to keep gold with them, and indeed, small-scale investors buy bars and coins.

The total world quantity of precious metals is limited. While more and more is discovered every day, it is by a relatively slow amount, and there is a finite amount in the world. In theory this means that values should never crash catastrophically, and that precious metals will always be worth something.

You can make a rough prediction that the value of most precious metals moves against the economy of the United States. This of course is only a generalisation, as prices will fluctuate more wildly than this, but it is a clear trend. As the economic crisis has gripped the west in recent years, the price of gold especially has soared, though this does not mean that gold is particularly safe.

Disadvantages of Investing

While huge money can be made by investing in precious metals, the most drastic price changes seem to have already happened, so there aren’t the same opportunities for big profits as there were a few years ago. This is not to say that precious metals aren’t a good investment of course, just that they may not be as lucrative as some would like to make out.

The main disadvantage to precious metals is that they are extremely volatile. Huge price jumps are not unheard of, and gold has doubled or halved in single years before. This can mean considerable risk, which is something you have to think about, as with all investment opportunities.


Investing in precious metals can be an extremely effective method, but it is certainly not without its downfalls. In order to counter this, it’s probably not a good idea to put too much of your portfolio into this kind of investment. If you have other opportunities in your portfolio, it means that you can counterbalance the potential risk of precious metals. A wealth management company such as Oakmount Partners can be an effective way of ensuring that you’re getting the most out of your money. It’s always good to get advice on your portfolio.