Gold vs. Other Precious Metals: Which is the Better Investment?

The Spotlight

10 minutes read

Apr 10, 2024

Precious metals bars on the blue background

Gold vs. other precious metals: understanding their differences as investment options and how they can help you diversify your portfolio and savings.

Investing in precious metals has long been a dependable approach for preserving wealth and growing your savings.

Precious metals such as gold, silver, platinum, and palladium are not only sought after for their intrinsic value but also hold significant demand in various industries, making them a steadfast choice for those looking to invest in physical assets for wealth accumulation and protection.

But which is the best metal to invest in?

In this article, we delve into precious metals investing, focusing on price trends, market movements, volatility, and the benefits each metal offers to investors, highlighting the distinct characteristics of gold, silver, platinum, and palladium.

Let’s dive in!

Precious metals investment: choosing the right metals for your portfolio🏅

Gold, silver, platinum, and palladium are the most common precious metals used to diversify investment portfolios. There are effectively two types of metals investing:

  • Physical investments Buying physical products like coins (think: certified gold like Maple Leaf coins), or bars. This is the most straightforward method of ownership. When you buy a physical product, you're getting a tangible asset that you can see, touch, and store. This direct form of investment means you have actual possession of the metal, giving you complete control over your investment.
  • Precious metal investment funds Purchasing investment products like gold futures or metal ETFs investments (exchange-traded funds). Both futures and ETFs can add diversity to your portfolio and offer a way to invest in metals without dealing with physical products. However, they come with their own risks and complexities, and they don't give you the tangible ownership.
A graph showing the gold price over time
A graph showing the gold price over time

🪙 Gold, a timeless investment

As the most recognisable precious metal, gold is one of the best precious metals to buy as it's in demand due to its lustre, malleability and its historical appeal.

Gold is primarily used in jewelry and as a form of currency, but it also has numerous helpful applications in industries such as electronics, dentistry and merging sustainable products like solar panels.

Available as coins, bullion, bars, and gold jewelry such as rings and necklaces, there is often a high demand for gold.

The market value of gold fluctuates throughout the day but is often seen as a reliable long-term investment.

Great for building wealth over a long period, gold has historically risen in value since the turn of the 20th century.

Uncertainty and major events such as wars and financial crashes can help increase gold prices, especially compared to other metals.

A graph showing silver prices over time
A graph showing the silver price over time

🩶 Silver, an affordable alternative to gold and a reliable store of value 

A pile of silver bars and a gold bar on the pink background

When comparing silver and gold as investments, both metals can enhance your portfolio by adding diversity. Gold is traditionally seen as a safe investment, maintaining its value well over time and offering a stable hedge against inflation and economic uncertainty. It's the go-to choice for investors looking for a reliable store of value.

Silver, while also a valuable metal, is more affordable, making it an attractive entry point for beginners interested in precious metals investing. However, it's important to note that silver prices tend to be more volatile than gold. This volatility means that silver can offer higher gains, but it also comes with increased risk. For investors willing to navigate these price fluctuations, silver can provide exciting opportunities to benefit from short-term market movements.

In essence, gold is suited for those seeking stability in their investment portfolio, while silver might appeal to those looking for more affordable investments and are comfortable with higher risk for potentially greater rewards. Both metals have their place in a well-diversified investment strategy, depending on individual risk tolerance and investment goals.

So, why buy physical silver? 

  • It’s affordable Silver is an affordable precious metal compared to gold: you can buy more silver for the same price;
  • Great diversification option Silver, like gold, is seen as a protection against inflation and is often used by investors as a way to diversify their investment portfolios.
  • It's VAT-free! At GOLD AVENUE, we’ve designed a unique solution that lets you buy silver with 0% VAT. Buy VAT-free silver.

A graph showing the platinum price over time
A graph showing the platinum price over time

🎖️ Platinum, a premium choice but the most volatile of commodities

When you think about investing in precious metals, gold probably comes to mind first. It's popular and has been a symbol of wealth for ages. But let's talk about platinum, a less common but intriguing option.

Platinum is pretty special because it's much rarer than gold. This rarity means it can sometimes be more expensive than gold. It's like when something is hard to find in the store; it often costs more. Platinum is mainly dug up from places like South Africa, Colombia, Canada, and Russia. Since it's not found everywhere, any trouble in these areas can make platinum's price jump up and down more than gold.

Now, why think about putting your money in platinum? Well, besides being used to make beautiful jewelry, it's super useful in cars and computers. This wide use makes platinum an exciting choice if you're looking to grow your money. But remember, its price can change a lot because it's so rare and because the places it comes from can have political or economic issues.

So, if you're thinking about adding some precious metals to your investments, consider mixing it up with both gold and platinum. Gold is more stable, a kind of "slow and steady wins the race" investment. Platinum, though, could offer some quicker wins because of its price jumps. It's all about balancing things out to keep your investments safe while also having a chance to make some good gains.

A graph showing the palladium price over time
A graph showing the palladium price over time

😍 Palladium, a rare precious metal

Palladium's claim to fame comes from its industrial superhero status. It's a key player in electronics, dentistry, and even environmental technology like groundwater treatment. This wide range of uses keeps the demand for palladium robust, contributing to its investment appeal.

What's interesting about palladium is its rarity (it's 30 times rarer than gold!). Palladium is primarily mined in just a couple of places around the world, mainly Russia and South Africa. This limited supply, coupled with strong industrial demand, can lead to some interesting dynamics in its market price.

While gold is prized for its enduring value and stability, palladium's price can be more of a roller coaster, offering potentially higher gains (with corresponding risks) for those willing to ride the waves.

In a diversified investment strategy, gold offers that solid, dependable anchor, known for its ability to hold its value over time. Palladium, on the other hand, introduces an element of growth potential and excitement, driven by its industrial indispensability and rarity. Together, they can provide a balanced mix of safety and speculative opportunity, making your portfolio not only more resilient but also more dynamic.

Are precious metals a good investment? 🤔

A man looking at his own shadown shaped like a question mark

Investing in precious metals like gold, silver, platinum, and palladium can offer practical benefits for your portfolio:

  • Gold is known for its reliability, especially during inflation. It's a solid choice if you're looking to safeguard your wealth, as it tends to hold its value even when other investments falter.
  • Silver is more affordable than gold, making it an accessible way to diversify your investments. It's also widely used in industries, which means its value has the potential to grow based on market demand.
  • Platinum's value comes from its rarity and industrial use, particularly in automotive manufacturing. This makes it a good option if you're interested in a metal with both investment and industrial demand.
  • Palladium, used in automotive pollution control, has a solid industrial base supporting its value. Its limited supply and industrial importance can lead to growth, making it a good choice for portfolio diversification.

Adding precious metals in your portfolio can help protect against inflation, reduce risk through diversification, and provide tangible assets. Each metal has its own role in a well-rounded investment strategy, helping to meet various financial goals and risk preferences.


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