Gold, Silver, Platinum and Palladium Explained
Precious metals are rare metals with lasting value. The four most followed are gold, silver, platinum and palladium. Prices are normally quoted in US dollars per troy ounce, which is about 31.1 grams.
Gold
Gold is mainly a store of value. Central banks hold it as a reserve, investors buy it to protect against inflation and uncertainty, and jewelry makes up a large share of demand. Gold often does well when real interest rates are low or when investors are nervous.
Silver
Silver is both an investment metal and an industrial one. It is used in electronics, solar panels and many other products. Because of this double role, its price follows gold's mood but also responds to the strength of industry, and it usually moves more sharply than gold.
Platinum
Platinum is rarer than gold. A large part of demand comes from catalytic converters, which clean vehicle exhaust, and from industrial and chemical processes. Supply is concentrated in a few countries, so mining problems can have a visible effect on price.
Palladium
Palladium is also used mainly in catalytic converters, especially for gasoline vehicles. Its price is sensitive to car production and emission rules and to the shift toward electric vehicles.
What moves the prices
- The US dollar: since the metals are priced in dollars, a stronger dollar can weigh on prices.
- Interest rates and inflation.
- Industrial demand, especially for silver, platinum and palladium.
- Supply from mines and recycling.
- Investor sentiment and geopolitical events.
Prices of precious metals can swing sharply and they do not pay interest or dividends. As with any asset, they carry risk.
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Disclaimer: this article is for education only and is not investment advice. See our Terms & Disclaimer.