Precious metals as an investment - statistics & facts

Precious metals have long been considered an important investment instrument, especially for people looking to reduce risk by owning an asset with an intrinsic value that cannot be easily eroded through inflation. Gold is the most prominent example, with many considering physical ownership of gold a hedge against cyclic economic downturns or even economic collapse. In fact, the demand for gold as an investment outweighs its demand for industrial uses - more so if you consider owning jewelry as a form of investment. This type of demand contrasts sharply to other precious metals. The industrial demand for silver, for example, is twice as high than its demand for investment - the opposite from gold. For platinum, the industrial demand was around 10 times the need for investment. This is likely due to the many different end uses of platinum.

Gold is not the fastest-growing

Gold and silver prices increased since 2019 before beginning to decline once again in 2022, but when compared against price indices for five other precious metals did not grow as fast as the prices of iridium and, especially, rhodium. This price rise has been attributed to rhodium’s use in automotive catalytic converters required to meet strict emission requirements imposed by many countries, along with a constriction in supply. Accordingly, the price of rhodium is almost eight and a half times higher than the price of gold as of September 2022. Importantly, this demonstrates how the value of individual precious metals can be affected differently by the broader market and political forces – it is notable that the price of rhodium fell with the onset of the coronavirus pandemic around February 2020, while the price of gold trended slightly upwards. This suggests gold may still be the safer investment to hedge against economic turmoil – just not the most profitable in this case.

ETFs and other entryways into precious metals

Investing in physical metals is one way to invest in precious metals, but this is not practical for many people as the cost of entry can be high and there is the requirement to safely store them. Securities that track or are aligned with precious metals are a way to overcome these barriers. Precious metals exchange-traded funds (ETFs) provide a return by tracking the price of physical metals by direct investment often in a basket of securities. Exchange-traded commodities (ETCs) are similar to ETFs tracking price movements of precious metals. However, these are debt instruments underwritten by a bank often with a specific focus, such as the performance of the gold bullion through ETCs. Investors also have the option to invest in companies involved in the precious metals industry, such as the largest public gold mining companies. These stocks may be affected by trends in the precious metals industry but do not track the performance or spot price of the metals.
This text provides general information. Statista assumes no liability for the information given being complete or correct. Due to varying update cycles, statistics can display more up-to-date data than referenced in the text.
Published by Statista Research Department, Jan 10, 2024

Key insights

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1700 USD/toz
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