About Precious Metals

What defines a precious metal?

In contrast to base metals, precious metals are resistant to corrosion. They do not react with other substances like water or air at room temperature. Precious metals, therefore, do not rust like iron. Only silver exhibits minor reactions with hydrogen sulfide, forming a thin layer of black silver sulfide, yet the silver remains unaffected. Even hydrochloric acid cannot damage the structure of precious metals.

Why invest in precious metals?

Silver and especially gold are considered stable assets. A complete loss of value, as seen with stocks and other forms of investment, is unlikely to occur with gold and silver. Gold, in particular, is often purchased to secure wealth. It serves as a hedge against crises, providing protection against inflation, stock market crashes, and total loss.

Those who already own gold can diversify their investments by purchasing other precious metals. It is always beneficial to have a broader portfolio rather than relying solely on one asset, minimizing the risks associated with market fluctuations.

Which precious metal to choose?

The choice of which precious metal to buy depends entirely on personal preferences and individual financial situations. Gold bars, gold coins, silver, or platinum are suitable for long-term supplementary investments. The classic gold is suitable for everyone, while silver complements gold well. Investors with industry knowledge may consider adding platinum and palladium to their portfolio. The demand for these metals is determined by specific industrial sectors, leading to volatile markets. Experienced investors often choose them as supplementary investments. Those willing to take risks can also opt for more exotic precious metals, thus increasing their chances of returns.

Gold, silver, and other precious metals are secure investments. Due to their rarity and the labor-intensive process of extraction, they possess intrinsic value. However, precious metals are subject to price and demand fluctuations, making them less suitable for short-term investment horizons. In conclusion, unlike other securities, precious metals are investments without default risks. An additional advantage of gold is that the purchase of bars or coins is exempt from value-added tax, and the sale after a holding period of just one year is also exempt from capital gains tax.