Throughout the years, gold, silver, and other precious metals have maintained a solid reputation for being smart investments. Part of the reason for this is because of the potential to enjoy a decent rate of return (RoR) for many of the common precious metals bought and sold today. Here’s what you need to know about the RoR associated with investments of this nature, brought to you by the experts from First National Bullion. Scottsdale investors should consider the following information when they’re considering investing in precious metals.
According to Unboundinvestor.com, the average rate of return for gold for the past 105 years averages 4.5 percent. Yes, this is on the low side, but that’s mainly because of efforts to control gold ownership. During a large part of the 20th century, private ownership of gold was prohibited, although this ended in the early 1970s. The actual return rate for this precious metal can be much higher when demand spikes, like what happened recently during the pandemic. In fact, if you break down gold’s average return rate into shorter periods of time, the RoR potential can get into double digits.
If you look at the same 105-year time period, silver actually has a return rate a bit lower than the average for gold for the same period. This may not seem good, but silver’s return rate average is also a lot better if you break it down into smaller periods. If you go from 2001 to the present, the average rate of return for silver is over 20 percent due to the increase in spot prices during this same period.
Other Precious Metals
Because of the many variables that can apply over longer periods, Unboundinvestor.com broke down average rates of return for other precious metals into “10-year bests,” referring to the average RoR during more recent periods of time. For example, platinum has an average rate of return based on overall historical performance of 2.8 percent. However, if you look at the 10-year best average, the RoR for this precious metal jumps to 13.2 percent. Now let’s do the same thing with palladium and copper, two other precious metals that can be appealing to investors:
• Palladium – The average rate of return historically for palladium is 8.6 percent, and the 10-year best is approximately 28 percent.
• Copper – Copper has a historical average of 3.8 percent, and the 10-year best average for this precious metal is 18.2 percent.
Key Factors to Consider
Demand for precious metals at various times is one of the main factors that can affect rate of return averages over time. Economic factors, to some extent, can also play a role in the RoR potential for commonly traded and valued precious metals. With any trading, buying, or selling, do your own research to determine what’s going on with spot prices, demand, and other relevant factors to optimize the return on your initial investment. If you’re fairly new to precious metals investments, you may prefer to get some advice from an investment professional before you actively buy and sell.
If you’re building an investment portfolio and looking for the best place to purchase Scottsdale silver bars, gold coins, and other forms of precious metals, reach out to the trustworthy professionals at First National Bullion. We can answer all your questions and help you find all the information you need on how precious metals can be great investments. Give one of our experienced dealers a call today at (480) 546-5089.
The statements made in this blog are opinions, and past performance is not indicative of future returns. Precious metals, like all investments, carry risk. Precious metals and coins may appreciate, depreciate, or stay the same in cash value depending on a variety of factors. First National Bullion does not guarantee, and its website and employees make no representation, that any metals for sale will appreciate sufficiently to earn the customers a profit. The decision to buy, sell, or borrow precious metals and which precious metals to purchase, borrow, or sell are made at the customer’s sole discretion.