Market Analysis Precious Metals – The Specifics of Precious Metals

Market Analysis Precious Metals - The Specifics of Precious Metals

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The substitute currency that is accepted everywhere in the world without exception is gold. Not only private individuals hoard the precious metal, but also states have held gold reserves for centuries. An interview with Dr. Peter Riedi of EM Global Service AG.

Gold is one of the best known precious metals in this world, despite that the list of all precious metals is long. Platinum, ruthenium, rhodium, palladium, osmium and iridium also belong to this category. In the broadest sense, silver and mercury are also included, although they have slightly different properties. What is special about precious metals and the reason for their high demand is their resistance to corrosion. This means that these metals do not react with substances in their environment, such as water or air, at room temperature. For this reason, unlike iron, precious metals cannot oxidize and thus retain their natural luster. Only silver shows a slight reaction with hydrogen sulfide. During this chemical reaction, a thin layer of black silver sulfide is formed. However, the silver remains undamaged and with proper care, the sulfide can be easily removed.

Why is gold so valuable?

Market Analysis Precious Metals - The Specifics of Precious Metals
Precious Metals / EM Global Service AG

Gold has fascinated people for thousands of years and is considered a symbol of wealth. One reason for the enthusiasm for gold is its scarcity. When analyzing the gold market, one finds that currently the total gold supply is just under 200,000 metric tons.

Yet the quantity is growing by a few thousand metric tons per year, or about 2 percent of the current global supply. Without this limitation, gold would probably be just one metal among many. However, the high demand cannot be attributed to scarcity alone. Gold has the unique property of being one of the most durable metals in the world. If you were to bury gold and dig it up again in 50 years, or even 50,000 years, it would still be in the same condition. This extraordinary durability is what makes gold so special, as it does not lose value over time. This is the reason why gold is used as an investment for many people. If, for example, the financial crises are considered from the past, it can be deduced that an investment in gold does not entail such a strong risk as an investment in shares or securities. Especially in times of low interest rates, gold represents an attractive investment for consumers. Despite these positive aspects, private investors should invest at most a small portion of their assets in gold.

Risk factors when investing in gold

Market Analysis Precious Metals - The Specifics of Precious Metals
Viktoria Akopjan / student & blogger

The high demand can not only be attributed to private investors, but also states such as China show a strong interest. However, this fact does not guarantee a steady and regular increase in prices. In the past, due to price losses, gold prices have also fallen. For this reason, investors should take into account that traders set lower buying prices than selling prices. At this point, it should be noted that precious metals must be stored as safely as possible after purchase. In order not to store the investment in one’s own four walls, a safe deposit box at a bank is a good option. It is important to clarify up to what value the safe deposit box is insured. The disadvantage of this is that this type of storage is associated with additional ongoing costs. In addition, companies offer centralized storage. In order not to rely on only one precious metal, the company EM Service Global AG also offers the purchase and storage of other precious metals to provide a balanced basket. Dr. Riedi comments: „In addition to all these aspects mentioned, it should not be forgotten that gold carries a certain currency risk, because gold is traded in U.S. dollars. This means: If the dollar is devalued, there are disadvantages for the investor when reselling gold, because he gets fewer euros for the dollar. In this case, losses can occur under certain circumstances, even though the price of gold in dollars has increased. Another aspect that should not be ignored as an investor is the fluctuation of gold prices. If in the future the demand for gold decreases, the gold price will also decrease. In the past, strong fluctuations could already be observed.“ From Dr. Riedi’s point of view, a mix of metals is therefore a smart approach for customers who want to benefit from the performance and security of metals.

V.i.S.d.P.:

Viktoria Akopjan
Student & Blogger

About the author:

Viktoria Akopjan is studying Health Economics with a specialization in Hospital and Pharmacy Management at the Apollon University of Health Care Management. Her interests relate to nutritional sciences, public health, and digital development in the healthcare industry. As a working student in the field of human resources development, she is gaining experience for the change to digital transformation.

Contact:

EM Global Service AG
Landstrasse 114
FL- 9495 Triesen
Principality of Liechtenstein
Phone +423 230 31 21
Fax +423 230 31 22

Contact person:

Dr. Peter Riedi
info@em-global-service.li
www.em-global-service.li

Market Analysis Precious Metals - The Specifics of Precious Metals

Company description

Located in the heart of Europe, EM Global Service AG designs and manages commodity and precious metal concepts. The range of services of EM Global Service AG includes the acquisition, custody and security of physical precious metals for the owners, the buyers. The company with her team builds on economic stability and secure it with reliability and discretion in asset custody in the heart of Europe. For more information, visit www.em-global-service.li

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