Investing in Metal Markets for Q3 2021

As we enter Q3 of 2021, you may be interested in expanding your portfolio by investing in the metals market. Whether it’s base metals, precious metals, or rare earth metals, the metal market offers active traders a variety of investment options.

So, as a new investor in the metals market, what are your options? You can choose to own physical metals, such as gold, as investors do in anticipation of economic downturns.

Another popular route is investing in companies that mine and manufacture metals. Other investors choose to stake their fortune in precious metal ETFs, which can be easier for new investors to access.

No matter the way you choose to invest, make a smart investment decision. Learn more about metal market investment and where you can get the latest information.

Base Metals

As you’ve likely learned about the periodic table in high school chemistry class, some metals oxidize (rust) or corrode easily. These metals are referred to as base metals, and they have a variety of industrial and commercial applications.

Base metals include copper, nickel, aluminum, zinc, lead, tin, and iron/steel. You can find base metals in plumbing, electronics, cars, and plenty more industries.

Because of their abundance and a wide variety of uses, base metals are not valued as highly as precious metals or rare metals.

Prices for base metals are subject to change based on their demand. For example, as electric car demand rises, copper prices may begin rising due to high demand.

Are you interested in entering the base metals market? Then you have several options. You could choose to invest in companies that specialize in particular base metals.

Another route to take is trading futures and options contracts of individual metals. Or you could take a look at the variety of base metal ETFs available for investment.

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Precious Metals

Unlike base metals, precious metals are less abundant, which means they are valued higher. Compared to other metals and elements, precious metals are softer, more ductile, and less reactive.

Precious metals include gold, platinum, and palladium, and are used for jewelry, dental restorations, electronics, medical technology, and more.

So what are your investment options with precious metals? You can make a solid and smart investment choice by going with physical gold in the form of bars, coins, or jewelry.

But not everyone enjoys owning such valuable items, nor do they wish to pay to store or secure them. For those who don’t want physical gold, you can go with stocks, futures, ETFs, and more.

Rare Earth Metals

Rare earth metals, such as lanthanum, cerium, praseodymium, and neodymium may not sound familiar, but they are quite important to several industries.

Smartphones, computer chips, cameras, and more all rely on these rare earth metals to operate. You’re likely reading this from a device that uses one or all of these metals.

The reason rare earth metals are rare isn’t so much to do with their abundance as it is about the challenges facing extraction. Environmental concerns and geographical location help make rare earth metals a high-demand commodity.

Now that you have an understanding of its importance, let’s explore your investment options. Get your start in the rare earth metals market with exploration and processing companies. You can also choose to invest in rare metal ETFs such as the VanEck Vectors Rare Earth ETF.

Gold, Silver, and Copper Market

Gold Market
Gold has been valuable in trading for thousands of years. Even today, investors purchase gold as a shield against economic turmoil. Gold is renowned for its ability to hold value despite slowdowns or major recessions. Compared to cash, gold is a better hedge against periods of high inflation.

Unfortunately, not all investors have access to physical gold, especially new investors. Instead, new investors should consider investing in gold mining companies or gold ETFs. Gold stocks and gold ETFs are both accessible options for investors who want to take part in the gold market.

Silver Market
If you’re interested in investing in other parts of the metal markets, silver is a great option. Due to its price, newer investors will find it easier to start building a portfolio with silver stocks. You won’t find many companies that will be mining just silver. Most metal mining companies will search for other metals as well. So you’ll need to do your research on precious metal mining companies.

But why would you invest in silver? Consider its industrial use, especially in the expanding solar energy industry. Silver is also used in jewelry and for electronic devices. As the demand for silver rises, companies that mine it and other metals will see more chances to expand.

Copper Market
Copper has wide industrial and manufacturing uses. As demand for electric cars and other green technology increases, so will the demand for copper. Compared to silver or gold, copper is overlooked. Copper demand is rising with its industrial usage, which makes investing in copper mining stocks a solid investment choice.

Despite a rough year in 2020, copper stocks have bounced back as the economy recovers. After a slow start to Q1, the copper market began building momentum in Q2. So long as there is no major disruption to the copper supply chain, some investors believe that copper prices will remain high for the rest of the year.

What To Know About Precious Metal ETFs for Q3 2021

As mentioned earlier, one of your investment vehicles for precious metals is exchange-traded funds (ETFs). You may find it easier to approach precious metal ETFs when compared to publicly traded companies, bullion, and futures contracts.

The U.S.’s precious metals ETFs comprise 14 funds and funds with less than $50 million in managed assets. Instead of investing in shares of precious metals mining companies, these ETFs are invested in physical metals.

Over the past year, the benchmark precious metal ETF S&P GSCI Precious Metal Index significantly underperformed the market. In fact, its total return has been 7.2% in the last 12 months.

For those curious about investing in metal markets or precious metal ETFs, Aberdeen Standard Physical Shares ETF had the best performance over the past year.

Become a Better Investor

Everyone wants to make money in the stock market, but not all investors know how to achieve success investing in metal markets. But in a digital world, how can you know that the information you’re reading is coming from a trusted source? Discover a community of investors who share similar goals of becoming better investors. Dear Retail Investors have access to the latest information about gold price behavior, ETFs for both stocks and the metals market, and so much more. Become a better investor today.

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