theFIREstarter

With the current economic and political uncertainty that is echoing across the globe, from Brexit and the Trump administration to the continuing conflicts in the Middle East, more and more investors are looking for safer ways to protect and grow their wealth. One of these ways is by investing in physical precious metals, or bullion, as owning these assets outright means no counterparty risk and therefore a safer way of investing. Of course, the bullion market can be a volatile place, so it is by no means risk free, but by owning physical assets with intrinsic worth you greatly reduce the risks of your investment.

If you are new to bullion investment, it can be daunting to make decisions about which precious metals to buy, when to buy them and how to store them. By acquainting yourself with the basics of bullion investment, though, you will set yourself up for successful, low-risk investments. The first thing you need to know is that there are four main precious metals to invest in: gold, silver, platinum and palladium. Which of these you choose will define many of your choices throughout the investment process, and each has its own individual quirks and qualities, so it is vital that you know the intricacies of each one before you proceed.

Gold Bullion

Investing in gold bullion is one of the most popular and most ancient ways of protecting wealth. Gold is often seen as a safe haven investment, as it maintains an intrinsic value over time, rising and falling with the economic outlook but always returning to a steady value. In many ways, gold is the most stable of these four precious metals, as its prices are less volatile and many investors use it as part of a pension portfolio. Due to this relative stability, gold is best for long term investments and wealth protection, and less productive for making immediate profits. Gold is VAT free within Europe, and some gold bullion coins are free from Capital Gains Tax in the UK.

Silver Bullion

Silver is gold’s more volatile cousin, and is often used to balance out bullion portfolios as a short-term, profitable investment. The silver price follows a similar pattern to the gold price, but amplified so that the changes are often much bigger over a shorter period of time. Investors who are experienced in buying and selling silver can find it very profitable, and the large amounts of silver available make it a very popular option. Unlike gold, silver does come with the added cost of VAT, but this is usually included in the price advertised by bullion suppliers. The significantly lower cost of silver can make it easier to store, which is one less concern for investors without access to a vault.

Platinum Bullion

The recent fall in the platinum price has made it an increasingly attractive option for bullion investors looking to expand their bullion portfolios. A very rare and largely in demand precious metal, platinum is a very popular metal in industries such as commuting, automotive and jewellery. These factors affect its price, as do the economic and political issues that affect the bullion market as a whole. These influences mean that platinum prices are highly volatile, even more volatile than silver at times, even though its price is much closer to gold than it is to silver. The amount of platinum mined in a year is 25 times less than the amount of gold, which makes it a highly sought after metal for both investors and industries.

Palladium Bullion

Palladium bullion has experienced an incredibly surge so far this year, with prices rising more than those of any other precious metal. Palladium prices are usually a little under platinum prices, although the different factors affecting the two metals can cause this to change. Palladium is structurally and aesthetically very close to platinum, and is in the platinum family. Both of these metals are mined mainly in South Africa, Russia and the US, and both are highly in demand in the automotive industry. Palladium is also a popular metal for jewellers, as it is used in making white gold. The variety of palladium bullion bars and coins available is much less than that of gold and silver, which means that liquidity is poorer. However, palladium is gaining prominence in the market due to its recent performance, and is becoming more widely available from a range of bullion suppliers.