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Four Important Tips For Investing In Precious Metals

George Sterling | Tuesday, December 4th, 2012

An increasing number of people are opting to invest in precious metals nowadays but investing your money in precious metals is not the same as investing in stocks or foreign exchange.

If you have made up your mind about precious metals, you have made a good choice but before you invest, keep the following tips in mind.

Investing in Gold

Gold is the most renowned precious metal to invest in but there are other options such as platinum and silver. Silver has been stagnant for the past few months and has increased by a relatively smaller margin. On the contrary, platinum and palladium are increasing rapidly. It is always best to diversify your portfolio to spread risk and returns adequately.

Be Careful

A lot of people choose to buy precious metals on the internet. This is because they don’t feel comfortable keeping big bars of precious metals at home. There is nothing wrong with buying precious metals from online retailers but you have to be careful when buying gold coins or other metal coins. There are a lot of fake retailers that may sell you fake coins or over estimate the extent of purity of the metals. Always buy from trusted sources.

Observe Market Trends

Even though investing in precious metals is different than investing in stocks or foreign exchange, it still doesn’t mean that you shouldn’t brief yourself about the market trends. Before you put in your money, always look at how the metals you are thinking of investing in have been performing. Look at market trends and keep a close eye on the metals’ daily performances. Always remember that when a metal is increasing in worth, it is not a good idea to buy it. Always invest when there is a slight drop in market prices of the metals and then sell at a higher price whenever the value of the metal increases.

Don’t Buy Metals In Jewelry Form

What people don’t know is that when it comes to investing in precious metals such as gold, silver, platinum or any other metal for that matter, they should NEVER buy it in the form of jewelry. There is a lot of cutting and wasting involved when metals are purchased in the form of jewelry and therefore, remember that investing in bars or coins is the best idea. Bars and coins are found in the purest form and are accepted by all traders globally. If you buy metals in jewelry form, you are probably going to end up spending $1000 to buy it and lose $100 while selling because whoever buys the jewelry from you will subtract costs of making and cutting from it. Additionally, metals in jewelry form are always overpriced.

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