7 Things You Need to Know about Precious Metals Prices

Precious Metals PricesKnowing these 7 things about precious metals and their prices will help you get started creating a diversified and recession proof portfolio.

1. Precious metals prices do not follow the typical ounce, instead the price quoted is for a Troy ounce. A Troy ounce contains slightly more than thirty one grams versus the usual twenty eight grams, and if you are purchasing precious metals like gold, silver, or platinum bullion this is an important distinction.

2. There are a few different precious metals prices. These include the market price of bullion and the spot price of precious metals, which are different for each precious metal traded. It is important that any investor understand the difference between these price types, to avoid any mistakes or capital losses that can result from a misunderstanding.

3. The market price of gold is the price that a buyer is willing to pay, with all of the relevant facts being known. This is usually calculated as an average of the prices of all the bullion being bought and sold on the market at the given time.

4. Spot price of precious metals is determined twice daily by the London Gold Market Fixing Ltd comprised of five world’s largest bullion traders. The gold and silver bullion spot price are calculated using the current spot price and includes dealer mark ups and charges. This price may be close to the market price but it does not have to be the same.

5. The gold bullion spot price can be determined by taking the gold futures and deducting certain expenses. The end result will be the spot precious metals prices, and these are used to set a price on the metals that you buy and sell at any given time.

6. Precious metals prices can fluctuate widely, and change from one hour, or even one minute, to the next. These prices are continuously going up and down, so most investors advise that these metals should normally be purchased for long term goals. Buying gold and other precious metals for quick gain involves higher risks because of the price fluctuations.

7. Prices of gold, silver and their counterparts always move in the opposite direction of market trends. When markets are doing well, prices for gold are plummeting and vise versa, in difficult economic times, these prices tend to significantly increase. This serves as a great hedge against inflation and market downfalls to protect your portfolio.

With the increase in price, almost every precious metal can be a great investment opportunity. One precious metal which is often overlooked by investors is a palladium bullion investment, but this metal price will normally follow the same pattern as other precious metals.