Precious metals as the name suggest, mainly refers to Silver and Gold. These are two main metals which are there in this category and are sought after for investment.
In a developing country and an economy like India, their demand usually remains high because of jewelry and charm of possession.
Here, silver is very volatile in nature, in terms of price movement and usually the volatility tests the nerve of an investor. It is also an industrial metal used in solar projects, electric cars, etc. and derives its demand from multiple avenues.
Gold, on the other hand is not only an asset but a currency of the world too. Governments and investors across the world use it to combat inflation and to protect themselves from depreciating currencies. It’s an interesting insight into the world of gold as to how it has stood the test of time from thousands of years and its major bull market started with US president Richard Nixon deciding on certain US policy way back in 1971. It is popularly called Nixon Shock and can be explored in detail.
The investment in these metals can be made through ETFs and certain bonds which keep coming from time to time. We can also look at certain mining companies dealing in this segment. However, silver is usually the biproduct in mining of other metals like Zinc, etc. and thus investors should be careful while selecting the stock for silver play.