Future of the Precious Metals Industry

Precious metals are rare, naturally occurring metallic chemical element of high economic value. Chemically, precious metals tend to be less reactive than most elements (see noble metal). They are usually ductile and have a high luster.

Historically, precious metals were important as currency but are now regarded mainly as investment and industrial raw materials. Gold, silver, platinum, and palladium each have an ISO 4217 currency code.

The best known precious metals are the coinage metals, which are gold and silver. Although both have industrial uses, they are better known for their uses in art, jewelry, and coinage. 

Group metals

Ruthenium, rhodium, palladium, osmium, iridium, and platinum, of which platinum is the most widely traded. The demand for precious metals is driven not only by their practical use but also by their role as investments and a store of value. 

The 5 Most Precious Metals On Earth

• Rhodium – Rhodium is one of the metals you will find listed on Market Spot Price
• Platinum – This identifiable metal held the throne in commodity pricing for decades until overtaken by Gold
• Gold
• Ruthenium
• Iridium

Gold is the most well-known and investable precious metal. It’s unique for its durability (it doesn’t corrode), shaping capability, and ability to conduct heat and electricity. While it has some industrial uses in dentistry and electronics, it’s primarily used to make jewelry or as a form of currency.

In 2023, Silver prices are expected to settle at around 23.5 U.S. dollars per troy ounce. It is expected to remain the precious metal with the lowest value per ounce. The price of gold is forecast to drop to around 1,663 U.S. dollars per ounce, making it the most expensive precious metal in 2023.

More broadly, strengthening demand and ongoing inflation concerns boosted gold prices while silver and platinum prices were further supported by the ongoing recovery in industrial activity and some supply disruptions. Precious metal prices are anticipated to stay high in 2021 before retreating in 2022.

Demand for Precious Metals

Platinum prices have been buoyed by a recovery in jewelry and industrial demand, tighter vehicle emission standards, and supply disruptions.  Platinum demand in industrial applications and jewelry demand has strengthened amid the recovery in global economic activity.

• Automotive demand has increased as tighter vehicle emission standards in China and Europe require higher platinum use in autocatalytic converters, while supply disruptions due to flooding at two mines in Russia also supported prices.
• The global shortage in semiconductor chips is a key variable for platinum demand, as auto manufacturers may be forced to drop certain chip-intensive features from some models or temporarily shut down some factories.
• In the longer term, battery-driven electric vehicles present a threat to auto catalyst demand in internal combustion engine vehicles.
• However, quicker adoption of green hydrogen technologies could boost platinum’s demand (platinum is used in fuel cells and in the electrolysis of water to produce green hydrogen).

Four precious metals are suitable for IRAs: gold, silver, platinum, and palladium.

Gold – Precious Yellow Metal

The shiny yellow metal has always been popular, particularly for jewelry. The atoms in gold are heavier, and the electrons move faster, creating a unique phenomenon of light absorption.

However, with the world investing in cryptocurrency, stocks, and online trading, it is still wise to make a direct investment in precious metals like physical gold coins. Yes, many investors choose to add gold to their portfolios.

Gold is also popular because it’s an excellent way to hedge against inflation (and deflation) and provides stability during economic and geopolitical uncertainty. Gold is the easiest precious metal to recognize because of its unique yellow color, malleability, and conductivity. Many Jewellery Designers heavily rely on Gold to design Jewellery which has hot demand in the market.

Uses: Jewellery, electronics, radiation shielding, thermal insulation

Major Sources: South Africa, United States, China, Australia

Silver

It is another precious metal that’s very popular for IRAs. This excellent conductor of heat and electricity is critical for electronics, jewelry, photography, and more. Its increasing demand coupled with its affordability makes silver an attractive prospect for many people looking to invest in precious metals.

Silver prices are lower than gold, making it an ideal investment for many Americans. Silver coins and bars also provide the same inherent value stability as gold and other precious metals during times of economic instability or when paper assets depreciate, like bonds and stocks. With the market being hot when Gold price goes down, Silver Investment is attractive one for Investors.

Uses: Jewellery, coins, batteries, electronics, dentistry, antimicrobial agents, photography

Major Sources: Peru, Mexico, Chile, China

Platinum

While platinum may not be as popular as gold and silver for investors, its rarity has made the price soar above gold several times in the last decades. It is one of the most precious metals in the world. As you know, platinum is an important resource in the automotive industry, where manufacturers use it for catalytic converters to keep down greenhouse gas emissions.

Platinum is also an essential commodity within the healthcare sector due to its excellent biocompatibility. This unique property makes it invaluable for use in sensors, stents, catheters, RFID devices, pacemakers, neuro-modulation devices, defibrillators, and more.

Palladium

Many think of gold and silver when considering investing in precious metals. However, many more options are available for investors, including palladium, which is on the list of IRA-approved precious metals. 

Palladium is also necessary for creating catalytic converters, and with interest in renewable energy rising, it’s in great demand around the globe. However, you can also find palladium in the dentistry tools, water treatment, jewelry, and electronics industries. For example, mixing palladium with gold creates white gold, a popular metal within the jewelry market.

Palladium is similar to platinum in its properties. Like platinum, this element can absorb an enormous quantity of hydrogen. It is a rare, malleable metal, able to maintain stability at high temperatures.

Uses: “White gold” jewelry, catalytic converters in automobiles, electrode plating in electronics

Major Sources: Russia, Canada, United States, South Africa

Rhodium 

Rhodium is a rare, highly reflective, silvery metal. It exhibits high corrosion resistance and has a high melting point.

Uses: Reflectivity, including jewelry, mirrors, and other reflectors, and automotive uses

Major Sources: South Africa, Canada, Russia

Bullion

Bullion is a physical metal that is pure or almost pure after refinement. The most common types include gold and silver bullion, although platinum and palladium are also available. Gold bullion is available in bars, ingots, or bullion coins, known as “rounds.” Gold bullion and silver bullion are two popular choices if you want to buy precious metals jewelry.

Why are Precious Metals a good investment?

• Increasing Demand: The fact that hundreds of industries depend on precious metals means that demand will only grow in the coming years.
• Hedge Against Inflation: As the American dollar declines in value, precious metals have become a way for investors to protect against inevitable inflation.
• Secure Investment: Many people prefer to invest in precious metals rather than the stock market, as they’re not under government control. This ensures their inherent value.
• Portfolio Diversity: Many investors with large portfolios choose to add precious metals to diversify their holdings and protect against economic downturns and price fluctuations.
• Finite Resource: Precious metals are a finite resource, and the Earth’s limited supply is decreasing steadily. As supply decreases, demand increases, pushing the value higher over time.
• High Liquidity: Precious metals are liquid assets, easy to sell, and not subject to the numerous risks associated with other common investment types and paper assets.

Additionally, precious metals investments are wise because they have intrinsic value and don’t pose a credit risk. Most investors agree that these valuable metals are an excellent way to reduce the risk and volatility of their investment portfolios, primarily due to their growth potential.

Is Platinum good to invest in?

Based on current market trends, if you want to buy precious metals, platinum is a superb choice. It’s a rare metal, about 20 to 30 times rarer than gold. According to the World Atlas, the top five countries that produce platinum are:

• South Africa: 68.32%
• Russia: 15.52%
• Zimbabwe: 6.83%
• Canada: 4.47%
• United States: 2.26%

Platinum is invaluable to the medical, automotive, and jewelry sectors, another reason why it’s such a good investment.

So, is platinum a better investment than gold and silver? Well, it can be. Gold tends to have greater stability regarding price movements. Still, platinum is rarer and integral to a growing number of industries, so the value will likely continue increasing in the future. However, that’s not to say that you also shouldn’t invest in gold, silver, or palladium.

Is Palladium a better investment than Platinum?

While palladium and platinum are in the same group of metals and look similar in appearance, they are different. Due to its demand within the automotive industry and limited availability, palladium prices are often higher than other precious metals.

However, many people prefer to invest in platinum over palladium, as the price tends to be more stable due to the frequent production limitations that affect palladium’s availability. If you can’t decide, we recommend investing in both platinum and palladium to diversify your portfolio.

Is Silver demand on the rise?

Traditionally, gold outperforms silver in terms of demand. However, that may be about to change. Silver has the highest electrical conductivity of all metals, which is why its use is so prevalent in electronic devices. However, its use in other industrial technologies is on the rise.

A report by Global News Wire states that the use of silver in electronic devices and other electrical applications will likely rise from 224 million ounces (2020) to 246 million ounces in 2025, which is a 10% increase.

Electronics and communications aren’t the only technologies where silver use will increase. Radio-frequency identification devices (RFID) also depend on silver, and according to a September 2021 Market Trend Report by CRU International Ltd., that usage will drive a 400% increase through 2030. 

Mintly, the hiring marketplace for the jewelry, gems, and metals industry, also aids in employment opportunities in jewelry market.

Final Thoughts

In conclusion, the future of the precious metals industry is looking strong. The steady increase in demand and prices, combined with a low supply of certain metals, points to a bright outlook for the industry. Investors are being attracted to these commodities as an alternative form of investment, and advances in technology are aiding companies in extracting the metals from more places than ever before. This increasing availability of resources coupled with a higher demand means that the precious metals industry is likely to remain a strong industry in years to come.