The Various Metal Commodities You Can Invest In

Commodities are in no way an asset that falls among investor favorites. They’re often less exciting than stocks, with more gradual motions that don’t promise quick returns. On top of that, correctly investing in commodities requires tracking various macroeconomic and global political factors. Because of that, commodity investing is not only less explosive but also more challenging than buying shares. Because of that, many traders and investors forgo it outright, deciding simply not to bother with the asset class.

However, there’s no denying that commodities are among the major asset classes. As such, investors that skip out on understanding commodities can’t ever own a complete investing skillset. Still, even inside commodities, there are multiple classes, each with its own nuances. That makes the learning process much slower and more methodical, also requiring some prior knowledge. Additionally, that makes articles about commodity trading as a whole only marginally useful.

Naturally, that means commodity education needs to be more specific. Because of that, our topic today concerns the various metals you can buy and sell. Now, some traders will find us mistaken and want to correct us to precious metals since that’s the category they’ve seen in online brokerages. That’s a common misconception because most web brokers only offer the big two being silver and gold. In reality, there’s also another group of metals that’s rarely seen, but a valuable commodity class nonetheless.

Without further delay, we’d like to start our topic for today. Here, we’ll go over the various metals you can trade, as well as some interesting qualities of each. By the end, you’ll hopefully be much more confident in your knowledge about metals and perhaps even ready to begin investing in them.

Precious Metals

Precious metals are the more prevalent type, and one investors are more familiar with. To a degree, they’re simpler to grasp as they’re less heavily used for industrial endeavors. Because of that, their value can be simpler to predict, and there are fewer factors that determine their prices. However, unless you know exactly why you’re investing in a particular precious metal, you’re likely to lose money. Because of that, we’ll give you a short rundown of the most popular precious metals.

Gold

Undoubtedly the most commonly traded and well-known precious metal, gold, has a spot in many portfolios. As far as its physical capabilities go, it’s valuable because it’s malleable, durable, and an excellent heat and electricity conductor. Because of that, it does have some industrial usage, but that’s far from its primary role. Namely, gold is primarily valuable as a form of currency and for jewelry.

In the market, the value of gold hinges on speculation and sentiments rather than supply and demand. Gold’s durable and long-lasting nature lets it circulate for a long time. That means the amount mined (supply) is vastly lower than the amount that’s already above-ground. Gold is often hoarded by various entities, and their willingness to buy or sell is what drives the price.

As we said, gold is valuable as a currency, meaning it’s great for times when inflation is high and currency value is questionable. Gold also gains value in uncertain times, such as wars or political instability.

Silver

Silver plays a similar role to gold, serving as a store of value and alternative to currency. However, its role goes to a much lesser degree. That means its value hinges on its industrial uses much more than gold’s. Because of that, although there’s a similar hoarding tendency, supply/demand play a much more prominent role. Naturally, that makes the prices more explosive, although still relatively stable compared to other assets.

Silver lost some value with the advent of digital photography, as silver-based film lost its use. However, other technological advancements and appliances that use silver more than made up for that. Batteries, superconductors, and microcircuits seem to be the most prominent demand creators for silver nowadays.

Platinum

Platinum is also a common asset in online trading, only a degree less common than gold and silver. Additionally, it’s the most volatile precious metal since it shares all the qualities of the previous two. However, unlike them, the demand is much more scarce, creating even more price fluctuations.

A significant portion of the global platinum supply comes from Russia and South Africa. This reliance on only two locations means there’s more potential for price manipulation. On top of that, use for platinum seems to be dropping as its primary use is in car manufacturing, specifically for harmful gas-reducing catalysts. A similar metal which we’ll cover in a minute, palladium, seems to be creeping to take over that role. Still, platinum remains important for jewelry production and the computer industry.

Palladium

Palladium is a less well-known and much more practical metal than the three above it. It’s seldom used for jewelry and has only seen fringe use as a currency replacement and store of value. Instead, its use is much more industrial, being used for catalytic convertor production. As we already mentioned, it has a spot in the car industry as well. It’s a durable and malleable metal and one that combined well with others to create better compounds.

Industrial Metals

Industrial metals are those without uses as currency or jewelry. Instead, their price is much more supply and demand-driven due to their practical usage. The assets are much less common in trading environments than precious metals, so it’s fair that investors pay less attention to them.

Aluminum

Aluminum is a highly versatile alloy that maintains both light weight and robustness. As far as industrial use goes, it’s the second-highest use metal across the globe. That makes it a worthy consideration for user portfolios, as it’s nearly always in high demand.

Steel

Steel is the most widely used metal in the world, with a variety of different uses. It’s an alloy of iron and other materials such as carbon or chromium and makes for a strong, resistant material. In the form of stainless steel, it’s also oxidation-resistant, making it impossible to rust. It’s used in nearly every industry, including construction and manufacturing.

Copper

Copper is a material that’s abundant, malleable, ductile, and soft. That makes it an excellent fit for many industrial uses. One of those uses, and perhaps the most common, is its use in manufacturing wires. Its high electrical and thermal conductivity makes it a perfect fit for the job. Still, it has various other uses in architecture, electric motors, and even traditional medicine and yoga.