Titanium, Platinum and Gold
It’s easy to lump precious metal investing into a single commodity bucket. That would be a mistake. Each metal has a unique profile and financial outlook.
The investment outlook varies based on several factors. Even precious metal obeys the law of supply and demand. Scarce metals will always have a higher price than more common materials. Metal that is in demand for jewelry or industrials uses will also enjoy high, stable pricing.
Here is an overview of the investment outlook for three precious metals.
Titanium is one of the most abundant metals on Earth. The Earth’s crust is about .62 percent titanium. However, it is hard to extract the metal from other ores.
This metal is typically found mixed with other ores. Countries that mine it include Australia, China, Canada, Norway, South Africa, Canada India, Ukraine and the United States.
Titanium is prized for its high strength and light weight. It is also very corrosion resistant. This combination of traits makes it an ideal choice for airplane parts, gas turbine components, heat exchangers, coils, linings, pumps, chemical processing and oil refining.
Titanium also has a place in consumer products, including sunscreens, plastics, paper and paint.
In 2014, titanium price varied between $5.74 and $6.25 per kilo.
Companies that produce titanium include Argex Mining, Dupont Chemical, Lyondell, Rio Tinto and Timet, among many others.
The best way to invest in this metal is to invest in the stock of one of the companies that mine and refine it.
Platinum is a dense and highly unreactive metal. It is one of the most rare elements on Earth. Annual production measures less than 200 tons per year.
Platinum deposits exist all over the world. South Africa is the largest platinum producer, followed by Zimbabwe, Russia, Canada and the United States.
Platinum is useful in high heat applications because of its high melt point. It is highly corrosion resistant. It conducts electricity well.
As a result of these traits, platinum is in high demand in electronics, catalytic converters. It is used in making silicone for the automotive, construction and aerospace industries. You can find it in thermocouples, infrared detectors and in ceramic capacitors.
Platinum is also used in jewelry. It is highly prized for its hardness, strength, purity and beauty. Platinum jewelry is quite costly when compared to other metals.
The price of platinum varies. In 2014 it averaged $1,391 per ounce. The price ranged from a high of nearly $1,500 to a low approaching $1,200.
Companies that produce platinum include Anglo Platinum, Impala Platinum, Lonmin plc and Norilsk Nickel among others. Most platinum companies also work with other metals.
There are many options for people who want to invest in platinum. You can own the physical metal as coins or bars. You can buy shares of an ETF. Platinum futures are available to investors. You can also invest directly in a platinum producer.
Gold has been used as money for centuries. It is a soft metal that is easy to shape. It resists corrosion and most acids. Annual gold production exceeded 2,900 tons in 2013.
Gold is produced in China, Australia, the United States, Russia, Peru, South Africa, Canada and many other nations.
The most frequent use for gold is in jewelry. In fact, jewelry accounts for about 50 percent of gold production. Industry only uses about 10 percent of the gold produced annually. The main use for gold is in electronics, heat shields, aircraft cockpits, textiles and infrared measuring equipment.
The remaining 40 percent of gold production is used as investments. Many central banks store large amounts of gold. Some governments also mint gold coins.
The price of gold was flat during 2014. The price hovered at about $1,200 an ounce for most of the year. Gold prices had risen steadily for several years before 2014.
Companies that mine gold include Goldcorp, Barrick Gold, Newmont Mining, Polyus Gold and Newcrest Mining, among others.
There are many options for investing in gold. You can buy gold bullion or coins and physically hold the metal. You can invest in an ETF or a commodities fund. Some of these funds invest in other commodities. Some only invest in gold.
There are gold exchanges open to individuals. With a gold exchange, you may receive a certificate of ownership rather than physical gold.
You may choose to invest in gold futures.
You can also invest in one of the mining companies. If this is your choice, pay careful attention to the company’s production cost per ounce. The cost per ounce is the key factor in profitability since each company sells gold at the same price.
You have many options for investing in precious metals. You can specialize in a particular metal. You can also invest in an ETF that diversifies. Many metal companies are public. You can buy their stock. You may also choose to hold the metal itself.
It is important to understand your goals. Once you know what you want, you can choose the metal that best meets your goals.
Titanium has both stable demand and an ample supply. This leads to stable prices. Investing in this metal is low risk. You will probably not earn very high returns. You also won’t lose capital.
Platinum is more a more volatile choice. Both supply and demand vary. The price changes often. It moves both up and down. If you follow the market closely, you may earn high returns. You will be taking more risk as well.
Gold is a safe investment. The price rises almost every year. Demand continues to grow. Supplies are ample. There are many ways to invest in gold. This lets you choose the best way to own gold and meet your goals.
Investing in precious metals can be very exciting. You can also earn good returns. The trick is in knowing the market for each metal and choosing the one that best meets your needs.