Introduction to Precious Metals Guide
Acquiring Precious Metals like gold or silver from both the perspective of the coin collector and bullion stacker can be a worthwhile pursuit, but not something to dive into without arming yourself with the proper knowledge. This Introduction to Precious Metals Guide will provide you the fundamentals of owning precious metals and all the nuances within.
What are Precious Metals?
Precious metals are scarce metallic elements that occur naturally on Earth and due to their scarcity, are considered relatively valuable in most major economies. In the past, such precious metals were physically utilized as currency, but are now mostly used as financial backing and as a commodity. Today, the most common types of precious metals available for private sale are Silver, Gold, Platinum and Palladium, which are primarily used for striking coinage, although they are often used in industrial applications as well.
The defining characteristic of precious metals are that they only exist in limited amounts. While they are prized for their inherent scarcity, market value and demand, their aesthetics also affect the inherent worth of precious metals.
Common Types of Precious Metals
Gold is one of the most recognizable precious metals. Identified by atomic number 79 and the symbol AU, Gold is a soft and malleable yellowish metal, which often leads to it being strengthened by an alloy like copper. The American Gold Eagle is a great example of this phenomenon, as they are struck from .9167 fine gold and bolstered by an alloy of silver and copper. While gold often appears in jewelry and coins, and can often be a symbol of wealth itself, this yellow precious metal is also used in electronics and thermal insulation.
Silver is one of the more prevalent precious metals and is identified by atomic number 47 and the symbol AG. Silver is a soft white metal that is prized for its reflectivity and conductivity. It is commonly used in jewelry and coinage. While technically more prevalent than gold, it is more often created as a byproduct of the refining of other precious metals, and is actual less common than gold in its native state.
Platinum has risen in popularity over the years as a precious metal commodity and has become a mainstay in numismatics. Represented by atomic number 78 and the symbol Pt, platinum is another white metal that is renowned for its malleable nature and is one of the scarcer precious metals currently being traded. In addition to being used in the creation of jewelry and coinage, much like silver and gold, platinum has a multitude of industrial applications ranging from dentistry tools to catalytic converters.
Palladium is represented by atomic number 46 and the symbol Pd. In some respects, its properties are very similar to platinum, it is a scarce, white-silver medal that is both ductile and can withstand high temperatures, however it is less dense than platinum. Palladium is used in wide variety of applications just like platinum, and in recent years has become more common in coin production. The United States Mint has even issued Palladium American Eagles this past year, such as the One-Ounce Reverse Proof Palladium American Eagle they released in 2019.
What are the Benefits of Buying Precious Metals Like Silver and Gold?
There are many reasons to buy physical precious metals such as silver, gold, platinum and palladium. Such precious metals are considered by some to be a relatively safe method to store value over time. In addition, precious metals can be acquired in a variety of manners in today’s markets ranging from coins issued by sovereign mints to bars and rounds issued by private mints. Many of these options are struck with gorgeous designs that can be considered both an investment, and a work of art.
Purchasing precious metals also offers a level of privacy that is difficult to find elsewhere. If you’re buying privately, you may well be the only person that knows about your stack. You can even set up a precious metals IRA if you would like to use your retirement funds for silver bullion. Precious metals IRAs have become more popular in recent years due to a combination of factors, more on that to come later in the Resource Center.
Some begin acquiring precious metals simply as a worthwhile hobby. There is much knowledge to be gained from collecting coins. Precious Metals in the forms of coins, and even bars and bullion rounds, offer a physical connection to a specific place and time. Many are attracted to the endeavor of coin collecting due to the historical significance of circulating coinage. Others are attracted by the idea of collectability, that is of numismatic issues gaining value over time depending upon their mintage, release time, and other factors, while others still appreciate coins from a purely aesthetic perspective. Some coins are truly considered beautiful works of art or unique feats of technological innovation.
Coin Collecting vs Bullion Stacking: What’s the difference?
While the market is often referred to as the coin and bullion market, collecting coins and stacking bullion are two distinct approaches to owning precious metals. Overlap can exist between them and there are many people who do a bit of both, however the focus and what is importance to each, differs. Collectors generally acquire coins with values that are based on scarcity and other traits such as low mintage, special issues, and innovative minting techniques. A coin collector may take into consideration other aspects like the coin’s designer and history, as well as the general condition of the coin when making the decision to purchase a coin for their collection.
When it comes to bullion stacking, it’s all about how much metal you can acquire and at what price. Weight is king here. Stacking silver bullion is very popular because you can do it with virtually any budget across a wide range of product offerings such as silver bars, silver rounds, and even silver coins with low premiums, minted from a variety of precious metals. Some bullion enthusiasts pick one metal to stack such as gold or silver, while others diversify their hoard across a few different types of physical precious metals.
Whether your interests lie in stockpiling silver or collecting every year of issue American Silver Eagle that you can, educating yourself about the ins and outs of buying precious metals is integral to building a collection you can be proud of. To learn more about the distinctions between collecting coins and buying bullion, read more on this Info-Vault article.
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