When the term, “precious metals” is used, most people will only think of gold, silver or platinum. More informed individuals may even include palladium and indium in the group. The truth is slightly more complex, however. In addition to the more usual uses for gold and silver in the creation of jewelry and other adornments, there are another dozen or so precious metals that are highly prized for their chemical properties by a variety of industries.
By and large, these metals are scarce and require enormous amounts of time, energy and capital to produce. For these reasons,the actual value of precious metals varies depending on the industry involved but, in all cases, they are rare, in constant demand and growing ever scarcer.
Understanding the uses of precious metals in the various industries involved can go a long way to assuring the investor that there will be a strong and continued for all precious metals. It can also help the prudent investor to assemble a diverse basket of metals that will appreciate in value, protect against inflation and always retain their inherent value. The following examples illustrate some of the more usual baskets that are currently offered by precious metal’s dealers:
High Tech - Gold and Silver
These two metals are most often purchased by individuals as jewelry for personal use. Still, the demand for investment grade coins and bullion has steadily increased over the past two decades as everyone from pawn shops to governments have sought to increase their gold and silver holdings. Gold and silver are also in demand by a variety of industries such as electronics, medicine and computers. New uses are still being found for gold, most notably in the aerospace industry and significant amounts of gold can be found on any modern spacecraft.
Solar Energy & Indium
The photovoltaic cells used in the generation of electricity are a technological wonder that is partly based on the work of none other than Albert Einstein and on the remarkable properties of three precious metals, indium, gallium and hafnium. Indium, in particular, is indispensible for its inclusion in high power silicon chips that pushes their efficiency just above the 40% mark. A rapidly diminishing supply – some experts claim that there is only 10 years’ worth left - is another factor that bodes well for an increase in this metal’s price.
Tantalum, rhenium, tungsten as well as the previously mentioned indium and gallium are the precious metals important to the defense industry. The industry produces a range of very specialized systems and weapons that require these metals to have their maximum intended effect.
These facts make these precious metals of particular interest to the investor as the military has essentially unlimited resources when it comes to the acquisition of needed materials. In short, the defense industry can pay whatever the market demands to meet their raw material needs.
The Overall Picture for Precious Metals
The above three areas are only a smallcross section of the key industries around the world that are increasingly in need of precious metals. In addition to the common metals mentioned above, various industries are also in need of tellurium, tantalum, bismuth and a host of lesser known metals.
Despite ever better mining and refinement technologies, the supply of precious metals continues to tighten. It seems that the more the world produces, the more uses are found for them. Pardon the pun but precious metals have a particularly bright future and investors would be well advised to consider them for any investment portfolio.