Precious Metals

What are Precious Metals?

Precious metals are naturally occurring metals that are rare, durable, and valuable enough that people use them as investments. The four main metals that investors focus on are gold, silver, platinum, and palladium. What makes them "precious" is a combination of staying power and scarcity. They don’t rust or corrode, a little bit holds a lot of value, and new supply comes out of the ground slowly. Unlike a stock, which is a share of ownership in a company, a precious metal is a physical thing that doesn’t depend on a business staying profitable. They’re often used as a hedge against inflation. The tradeoff is that their prices can fluctuate quite a bit, and a bar of gold sitting in a safe doesn’t pay interest or a dividend.

Base Metals vs Precious Metals

Base metals are common, relatively inexpensive metals. They include copper, aluminum, zinc, nickel, lead, and tin. Precious metals are rare metals that carry a high value per ounce. They include gold, silver, platinum, and palladium. For an investor, the big difference is why people buy them. Base metals are used in manufacturing and construction. They’re essentially a bet on economic growth. When the world builds more homes, cars, and power grids, demand rises for copper and aluminum. Precious metals, especially gold, are often used as a hedge, which is an investment meant to hold up when something else goes wrong. That could be rising inflation, a weakening dollar, or a financial crisis. The difference is clear in the price gap. In mid-October 2026, a pound of copper cost about $6.60, while gold traded near $4,100 per ounce.

What are Gold ETFs?

A gold exchange-traded fund, or ETF for short, is a fund that owns gold or gold-related investments. You can buy and sell shares on a stock exchange, just like a stock. You don’t own gold directly, so you don’t have to worry about insurance, storage, or dealer premiums. Most ETFs do charge an annual fee to operate the fund, called an expense ratio, and the rates can vary widely. SPDR Gold Shares is the first U.S.-traded gold ETF, and it’s currently the biggest with about $140 billion in assets under management.

How Do You Invest in Precious Metals?

Precious metals are rare, naturally occurring metals valued for their scarcity and other uses. The principal metals that investors focus on are gold, silver, platinum, and palladium. You can invest in precious metals four main ways: buy the physical metal, buy a fund that tracks the metal's price, buy shares or funds of companies that mine it, or hold it inside a special retirement account. For most beginners, a fund bought through a regular brokerage account is the cheapest and simplest route. Physical coins and bars may appeal to investors who prefer something they can hold. Each choice gives you exposure to precious metals, but they can differ sharply in cost, taxes, and how easily you can buy and sell.

What is the Spot Price of Gold and Other Precious Metals?

The spot price is the current market price for one troy ounce of a precious metal that’s bought and sold for immediate delivery. It’s quoted for gold, silver, platinum, and palladium, usually in U.S. dollars, and it changes constantly while markets are open. A troy ounce, the standard unit for precious metals, weighs 31.1 grams, which is about 10% more than the regular ounce you see on a food label. Think of the spot price as the wholesale price of a precious metal. In mid-October, 2026, the spot price of gold was about $4,120. That’s roughly what a large bank or dealer pays another large bank or dealer for one troy ounce in bulk before any additional markups.

How are Gold and the U.S. Dollar Connected?

Gold and the U.S. dollar often move in opposite directions. When the dollar strengthens, gold tends to fall in price. When the dollar weakens, gold tends to rise. A strong dollar means it can buy more of other currencies, such as the euro or the Japanese yen. Gold trades in dollars, so a stronger dollar makes the precious metal more expensive for anyone paying in another currency. That can cool demand and pressure prices downward. Picture a buyer in Germany when gold costs $4,000 an ounce. If one euro buys $1.20, the ounce costs the buyer €3,333. If the dollar strengthens and one euro now buys $1.10, the same $4,000 ounce now costs €3,636. That’s about 9% more, even though the dollar price hasn’t changed. Fewer buyers outside the U.S. may be willing to pay that higher price, which can put downward pressure on gold prices in dollars. The reverse can happen when the dollar weakens. Gold looks cheaper to buyers using other currencies. Buying may pick up, and the price rises.

What's the Difference Between Gold and Silver?

Gold and silver are both precious metals but they behave very differently as investments. The big difference between the two is utility. Gold is rarer and is mostly bought to hold value. Silver is more common and is widely used in electronics, solar panels, and other manufactured products. Those differences drive their price per ounce, volatility, and how each metal reacts when the economy speeds up or slows down.

What's the Difference Between Precious Metals and Mining Stocks?

Precious metals are physical metals such as gold, silver, platinum, and palladium. You can own them directly as coins or bars, or indirectly through funds that hold the metal in a vault. Mining stocks are shares of companies that find, dig up, and sell those metals. With a stock, you own a piece of a business instead of the metal itself. When you own an ounce of a precious metal, your investment rises and falls with the price of the metal and nothing else. When you own a mining stock, your investment rises and falls with the company's profits. Those depend on precious metal prices, but also on the mining company’s costs, its management, the operation of its mines, and the overall stock market.