What Are Precious Metal Commodities?Precious metal commodities are rare metals that have an elevated economic value. This value is tied to factors such as scarcity, industrial application and store of value properties. These metals are sought after by investors because they act as a hedge against fiat currency, particularly during periods of inflation or systemic financial problems.
What Are Some Examples of Metal Commodities?Precious metal commodities that are commonly traded include gold, silver, platinum and palladium.
- Gold is durable, malleable and a conductor of heat and electricity. This gives it industrial value in addition to its value derived from being aesthetically pleasing and an essential element of jewelry.
- Silver’s use in batteries and superconductors makes it both industrial useful and a traditional store of value, like gold. However, silver prices tend to be more volatile.
- Platinum is an industrial metal like silver and has historically seen heavy use within the automotive industry, where it has numerous applications. Platinum is the most volatile of all precious metals and is only mined in two countries, which exposes it to cartel pricing.
- Palladium is regarded as the less expensive sister metal to platinum. It has been used in electronics, dentistry, the chemical industry and – like the other 3 – it’s also used in the jewelry industry.