For years, gold, silver, palladium, and platinum have been considered as the world’s most precious metals, and titanium has recently been added to the list. These metals have a unique combination of utility, scarcity, brilliance, durability, and unusual workability which makes them permeate with a variety of economic roles. They serve both industrial and investment purposes. From a financial perspective, precious metals can be used to protect one’s investments against factors such as inflation, thus safeguarding their purchasing power on a long-term basis. Precious metals are a vital balance to other classes of assets because they reduce the overall portfolio’s volatility that results from securities market fluctuations. Precious metals offer investors tangible assets with unparalleled liquidity.
Gold is the world’s most famous precious metal for its liquidity, beauty, investment qualities, and its industrial features. It has been viewed as a financial asset due to its stability in value and purchasing power during inflationary times. Jewelry accounts for the single largest demand for gold. Alternative uses include dental alloys, medical and health applications, electronic connections, radiation shielding, and more.
In recent months, global equity markets have repeatedly hit all-time highs: gold has also showed exemplary growth throughout this period. Gold’s value has risen to around $1,366.15 an ounce within the last week of January, 2018, the best since August, 2016. Investors sought protection from potential losses in share markets and inflation resurgence when the dollar slumped in the middle of December. Fundamentally, the value of gold is relative to that of the Dollar. The relationship has always been an inverse one as the price of gold is negatively correlated to the strength of the dollar. The continuous decline in the value of the dollar has contributed to the steady increase of gold’s price. According to ANZ, prices are expected to hold at the current levels through Q1 of 2018, before increasing to $1,400 at the end of 2018. Data from CNBC shows the closing price for the month of January was $100.16. Interestingly, ICE U.S. dollar index DXY +0.06%, a measure of US currency against a collection of six major rivals, had lost 0.3% at $89.07. These kinds of trends make dollar-denominated assets to be more attractive for investors as it is an indication of a weaker US dollar.
In January, the lowest and highest value of gold was $1,306.02 and $1,365.70 respectively. Major contributors to the increasing value of gold are the lowering of U.S. interest rates, weakening of the USD, and increased expectations of inflation. The increase in the price of crude oil and current geo-political tensions in Eastern Ukraine (what is now termed as “disruptive” US foreign policy) is also believed by some to have contributed to this hike. According to David Madden, a market analyst at CMC Markets, “Gold is still in the same trend it has been in since December…traders may not be keen to stay long going into the meeting.” There is an upcoming Federal Reserve update meeting which may have an oscillating impact on the price of the metal.
Silver has numerous uses such as jewelry, silverware, electrical contacts and connectors, among other industrial functions. Physical silver can be purchased as bullion bars or coins. The United States, Germany, and Canada are silver’s largest consumers.
Various indices have had different trading activities. Silver (Comex) traded at $17.20, slightly higher than other platforms. According to NASDAQ, a volume of $111,049 was traded in January with a closing price of around $17.11. The value of silver was seen to rally up around December by about 10%. The value of silver has not been fully appreciated as it currently remains as a shadow of gold, despite some saying there is reason for it not to be. The prices of silver on iShares Silver Trust, SLV, had constant fluctuations as the opening price stood at $16.21 and closed at $16.35.
Platinum is part of a category of metals referred to as “platinum group metals”. Platinum is used majorly for the production of platinum jewelry, with Japan topping the consumer list. It has several industrial applications, for instance, it can be used in the making of automotive catalytic converters. Platinum is also used in the refining process for chemicals and petroleum. Platinum’s rarity and diverse industrial applications render it an attractive investment alternative to competing assets. In a few instances, it is used as a substitute for gold. On Bloomberg markets, the platinum spot price stood at $1,004.18 USD reflecting a decline of 0.35%. The platinum spot on Reuters is currently at $1,002.90 USD as a slight decline of 0.29%.
This is primarily an industrial metal frequently used in some products as an alloy. There is a huge demand for palladium despite being relatively small in comparison to gold, silver, and platinum. Its uses are closely similar to those of other precious metals like platinum. Palladium is very vital in the production of jewelry, as well as acting as a catalyst in chemical and petroleum refining.
Historically, palladium hit a high of $2,252 in 2008 before resurging to $1,500. Palladium’s futures on NASDAQ closed the month at a low of $1,028.65. The value of palladium was expected to rise due to an increased demand at the beginning of the year but prices saw drastic drops. Gold eagle trading ended at $1,041 with the highest price recorded being at $1,137 before hitting its lowest for the month – $1,020.
Titanium is a strong and lightweight refractory transition metal. Its alloys are very critical in various applications. Titanium alloys are known to be super lightweight, very strong, and extremely resistant to corrosion. Titanium and its alloys are particularly important in the field of aeronautical engineering and medicine. It also has various chemical and military applications.
Unlike other precious metals, Titanium trading does not frequent most financial markets. Information from MetalMiner, a North American Titanium Index, shows that the prices of titanium have exhibited massive instability over the years. MetalMiner gives weighted averages of prices from various industries across all grades of titanium. The current price for a titanium TI-6-4 BAR in the US is around $25.6 per pound.
Overall, gold appears to be the ultimate store of value. However, owning physical gold comes with a fair share of challenges: it can be quite difficult and expensive to store and use. Luckily, you can now own digital gold which has similar properties to physical gold. DinarCoin is a unique digital currency created by DinarDirham. Its value is pegged to the current global gold spot price. 1 DinarCoin is equivalent to 4.25 grams of 999.9% pure gold. This makes it easy to convert the coins into Gold Smart Contracts or to redeem them for physical gold. DinarDirham has also developed a universal wallet where you can store your DinarCoins effortlessly. To learn more about this product, click here to visit DinarDirham’s official website.
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