Some of the most highly prized materials on Earth, precious metals have been bought, sold, traded, and even fought over for centuries. Today, you can find precious metals everywhere from the insides of industrial machinery to the ring fingers of most married people. In this quick guide, you’ll learn all the basics of three common precious metals and discover what you can expect when buying or selling precious metals.
What Are Precious Metals?
Precious metals are naturally occurring elements that are both durable and possess a beautiful luster or shine, even when unpolished. Precious metals, unlike other metallic elements, are fairly non-reactive and aren’t attracted to magnets, for example. Used for centuries as currency, in jewelry, in artwork, and as a symbol of wealth and status, today’s use of precious metals is primarily for industrial purposes (i.e. for electrical parts and components) or the production of jewelry. Gold, silver, and platinum (among other precious metals) are worth their weight in – well…gold, which is why it is important to know the value of what you own before you try to sell.
Gold is by far the most famous and popular precious metal in the world, worn by people from diverse backgrounds and even used today for some industrial applications. Steady and reliable, the price of gold has largely followed the cost of living and remains valuable even in economic crises. In addition to its economic stability, gold doesn’t rust or break easily, even when formed into thin wires or intricate pieces of jewelry.
Silver is highly anti-corrosive and considered one of the most ‘wearable’ precious metals thanks to its ability to withstand regular washing without tarnishing. While silver is beautiful when used for jewelry, the majority of today’s silver-market comes from industrial manufacturers seeking raw materials. Like gold, the cost of silver often reflects the overall state of the local economy.
Sometimes called the ‘most valuable’ of the precious metals, platinum possesses extreme tensile strength and durability, making it ideal for a variety of manufacturing and industrial applications. Most commonly, platinum is used by the automotive industry as a vital component of catalytic converters. Platinum prices tend to rise when automotive or industrial manufacturing numbers are up since this is when demand for this precious metal is at its peak.
If you have precious metals to sell and want to be sure you understand everything your dealer is telling you, you should first master some important terminology commonly used in the business to discuss the value of minerals like gold, silver, and platinum.
- Spot Price: Spot price refers to the current going rate of precious metals on the public financial market – this price fluctuates depending on demand, supply, and economic health
- Ask Price: The asking price of a precious metal is the price at which it is sold to a customer
- Buy Price: The buying price of a precious metal is the price at which it is purchased from a consumer
- Troy Ounces: Precious metals are measured in troy ounces, with 1 troy ounce equalling 1.09711 oz. or 31.103 g.
How Precious Metals are Priced
Since the price of precious metals fluctuates with changes to the economy or demand, there is no simple formula for pricing gold, silver, or platinum. While you may find that even the best and most reliable precious metals dealers can’t guarantee prices won’t fluctuate, this isn’t due to laziness or some inadequacy. One of the reasons working in the precious metals industry is difficult is because it takes years of practice to learn how to accurately price items, which may change in value according to the times.