What are Precious Metals?
Precious metals consist of a variety of compounds found in the earth to which we as human beings ascribe great value. This includes but is not limited to copper, silver, gold, platinum and palladium. Metals are not the same as gemstones (diamonds and emeralds, for example) and should be distinguished from those. Fine alloys are mined from the earth and derive their value from the various applications found for them in our lives, or, from the perceived value of these items based on their beauty. Here is gold coin.
One of the most important defining characteristics of precious metals is their scarcity, which is what makes them so precious. Alloys that have important uses in industry are therefore highly coveted. Additionally, metals remain precious because their value is able to remain steady over the course of many years. Therefore if you invest in expensive hardware, there is a strong likelihood that your investment will at the very least retain its value. Some metals retain their value to a greater degree than others because they are more scarce.
Precious alloys not only keep their value but increase in their overall worth as new industrial applications for these metals are found, or as these alloys undergo the processes of discovery and rediscovery by jewelry markets all over the world. Palladium, for example, is used in catalytic converters for most gas-powered vehicles. As toxic compounds enter the vehicle, palladium is used to convert those potentially harmful pollutants into more tenable substances that humans can absorb safely like water and carbon dioxide. Palladium also has applications in electricity and some dentistry.
Ultimately, most of us are familiar with the use of costly hardware in jewelry. These applications exist for a similar reason to their industrial uses: jewelry made of precious metals lasts longer because these substances are significantly more durable than other alloys one might use.
How do You Acquire Precious Metals?
Before purchasing an item, you must ask yourself “For what purpose?” The carat of a valuable alloy is determined by its purity. 24-carat gold is more pure than 14-carat gold, due to the fact that the gold itself is mixed with less metal alloys which allow it to hold its shape. 24-carat gold is more expensive than 14-carat gold, but 14-carat gold holds its shape better and is therefore more user-friendly for people purchasing precious ingots to wear in jewelry.
For example, a member of a royal family may be more interested in having a crown or a tiara made in 14-carat gold because it will not only mould to the shape of someone’s head more easily, it will also be available for use in hundreds of years if it is well preserved. Thus, exquisite metals must be carefully evaluated by an alloy dealer you can trust. Speaking of trust, how do you know if the precious hardware you are purchasing is the real deal?
How do you know you are not being scammed? That can be extremely difficult, and it is best to consult the Better Business Bureau to find out what other customers have said about a specific precious metals dealer. Some dealers have been accused of mixing alloys and compounds in such a way that the purity level of an alloy is not exactly as it has been advertised. Furthermore, some items may be advertised as pure ore but are instead plated ore, meaning the exterior of the item has the right look and is made of the right material, but the interior is made of inauthentic or low-quality materials that will have a negative impact on the value of the item.
Without proper authentication you may think you are purchasing a bar of gold or silver bouillon, but you might actually be acquiring a gold-plated bar of copper. This is why you must acquire precious alloys by having the items authenticated by a proper alloy dealer. Some dealers are excellent and some are not to be trusted, so I would recommend that you click here for more information on a sample investigation.
Pricing Precious Metals
How much is your grandmother’s platinum band worth? Should you hold onto it, or will it decrease in value over time? When you open your jewelry box, are there any items that will retain their value in their current shape, or should they be melted down to acquire more value?
The first answer to this question is the provenance of the item. Provenance is basically the history of the item — https://museum.cornell.edu/provenance-guidelines-resources — and how it came to be in your possession.
If your grandmothers platinum band was created by a jeweler who only offered pieces in a limited run, the band may increase in value as a piece of art. If your grandmother was photographed shaking Marilyn Monroe’s hand while wearing this ring, it may increase in value to collectors focused on the late movie star. If the ring was formerly part of a brooch that was recast to make a new item, the provenance of the brooch may add to the value of the ring if we discover that the brooch was stolen from Native Americans by warmongering colonizers. This adds to the importance of the hardware.
Investing in industrial metals is a bit more difficult, as their uses differ with each subsequent generation of engineers, inventors and industrialists looking for hardware that is both durable and able to meet the demands of production in a given time period. As a result, investing in industrial ores is about retaining a strong relationship with both your metals dealer and understanding the engineering needs of not only your current industrial landscape but also future industrial trends. If you are going to invest in precious minerals for industrial purposes, be sure to closely track the trends of the industry whose ores you are investing most heavily in. These items will retain their value due to their rarity and scarcity, but it is critical to know what applications they possess so that you make wise investments.