Which Precious Metals are the Best Investments?

Coal may have been mined in Southern Africa up to 40 000 years ago. However, the first evidence of humans utilising metal ores is much more recent. For example, the process of smelting Gold and Silver dates back around 6 000 years and began further north in Egypt and Sumeria. These Precious Metals were prized for their beauty and were among the first materials to be traded. While first used to manufacture Jewellery and ornaments, they were eventually adopted as currency. Although Silver is still primarily used for Jewellery and tableware, it also has applications in medicine, dentistry, optics and electronics. By contrast, the uses for Gold are manifold. While neither is still used as currency, they remain popular investment vehicles. 

Advances in extraction and smelting technology have since opened many additional opportunities for mineral exploitation resulting in the advent of several new Precious Metals. In 1736, a Spanish mariner discovered Platinum in Colombia. In addition to its exceptional resistance to corrosion, the element defied all attempts to melt it until the development of high-temperature smelting techniques. While also first used to make Jewellery, Platinum has since been used in catalytic converters, computers, chemotherapy and dentistry. Even more recently, the discovery of the rare elements Iridium, Rhodium, Ruthenium, Rhenium, Palladium and Osmium now sets the total count of highly-prized and expensive Metals to nine.

Of the nine, Rhodium is the rarest and most valuable. However, the Precious Metals most often traded for investment purposes are Gold, Silver and, to a lesser extent, Platinum. The latter was once the most expensive. However, it was overtaken by Gold, and the gap has consistently widened. When choosing the best investment vehicle, one must balance cost against performance. While Silver offers the cheapest entrée, its performance has been subject to substantial fluctuations. In 1979 it showed an annual growth of over 430%, only to shrink by more than 50% during the following year. 

If you’re on a tight budget, don’t be deterred. Watch the Precious Metals spot prices closely and choose the best time to sell your Silver coins or Bullion bars. By contrast, Gold’s performance has been far more consistent. It is your best investment opportunity if you can afford the higher purchase price. Fractional Krugerrands have opened the Gold market to those previously excluded by high prices. Now you can purchase a half, a quarter or one-tenth of an ounce of fine Gold to kick-start your investment, adding additional coins whenever possible. So, why choose Gold?

Like shares or other Precious Metals, the price of Gold moves up and down. However, it has never displayed the extreme fluctuations experienced by the stock market or other commodities. The Krugerrand is a perfect example. Anyone who purchased the iconic one-ounce coin in 1967 and decides to sell it today can look forward to almost a thousandfold return on their investment. Nevertheless, buying Gold is unlikely to make you rich overnight. Treat it as a medium to long-term investment or a hedge opportunity for your share portfolio.

Whatever you decide, be sure to choose a reputable dealer. Mr K is an accredited trader in Krugerrands, Bullion, Recycled Gold, Platinum and Silver and a member of the South African Association of Numismatic Dealers (SAAND) and the Jewellery Council of SA. Please view our range of Krugerrands or minted Gold and cast Silver Bullion bars.

Disclaimer: The information above was derived from reliable sources and deemed accurate at the time of writing. However, changes following publication may have affected its accuracy. Such changes may occur without notice and Mr K cannot be held liable for inaccuracies in this article’s content or how a reader may choose to interpret it.