Metal commodities are rare, naturally-occurring metallic elements in the Earth’s strata and have high economic value. Manufacturers use metal commodities for a variety of products like electronic parts, jewelry, and dental equipment. High-Value commodity metals include:

• Gold – It is the most essential metal in the precious metals trading industry. Amongst the precious metals, gold stands out for its durability and malleability. Although gold is used in manufacturing electronic parts at times, its primary demand is in the production of jewelry.
• Silver – Silver is widely used in the manufacture of both electronic products and jewelry. Among the commodity trading metals, silver traditionally holds a fraction of the value of gold, financially
• Platinum – Platinum is used to make catalytic converters for cars, in addition to jewelry. As the automobile industry is heavily reliant on this precious metal commodity, the price of platinum is determined heavily by the production and sales rates of automobiles
• Palladium – Palladium is used in the production of catalytic converters, electronic parts, and dental apparatus.

In addition to the above high-value metal commodities, there are some other base metal commodities which are:

• Aluminium
• Steel
• Copper
• Tin
• Zinc
• Iron 
• Lead
• Rhodium

These metal commodities have a huge list of industrial and commercial applications. The widespread use of base metal commodities, in items of everyday use, makes them essential elements of trade in the global market. Precious metals are valuable because they are rare. These metals mined from the earth are not only used in jewelry and minted into coins, but also serve industrial purposes. Both investors and industrialists prize precious metals. Precious metals commodities provide several benefits to investors, including: 

• Inflation Hedge: Precious metals prices have the potential to rise at or above the inflation rate.  
• These metal commodities are real assets that hold value beyond investment purposes such as jewelry or industrial uses.  
• All these metal commodities are fairly liquid investments. They can be easily converted to cash whenever needed
• Provides portfolio diversification. The price movements of precious metals don’t always go in the same direction as the stock or bond markets.

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However, it is also important to understand the risks of investing in metal commodities:

• Price Volatility – Several factors can drive prices, including changes in the economy, Federal Reserve policy, investor demand, mining supply, and inflation.

All these metal’s conventional sources are known as reserves which have to be mined to extract from the earth’s surface. It is widely believed that the cost of producing minerals and metals will increase as ore grades decline and deeper and more remote mineral deposits have to be exploited. The main factors that affect the long-term supply of mineral and metal commodities are:

• The cost of their production
• Developments in technologies associated with the exploration, mining, and processing of ores
• The nature of the political and economic system

Top Metal Commodities to Invest in 2023

Amongst all these metals the top metal commodities to invest in are:

1. Gold
2. Silver
3. Platinum
4. Palladium
5. Copper
6. Rhodium

Gold

Gold has been a favorite of precious metals for very long. It has been used as a store of value for thousands of years. Gold is known as an investment that tends to hold its value well during economic slowdowns, and which can ride out major recessions quite well.  Gold is also an excellent hedge during periods of high inflation compared to cash investments. While gold is a great investment, the cost of buying significant quantities of gold can be a bit prohibitive for some newer investors. There are many ways to invest in gold. Investors can purchase:

• Physical Gold coins, 
• Gold Bars
• And gold in the form of jewelry. 

Additionally, other ways of investing in gold are to buy gold stocks which include shares of companies involved in gold mining, streaming, or royalty companies. Also, investors can buy gold-focused exchange-traded funds (ETFs), or gold-focused mutual funds.  Each gold investment option has its pros and cons.  Some of the drawbacks of investing in gold are:

• The expense of storing and insuring physical gold
• The potential underperformance of gold stocks and gold ETFs versus the price of gold. 

Some of the advantages of investing in gold are:

• The ability of physical gold to track the precious metal’s price 
• The potential for outperformance by gold stocks and ETFs.  

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Silver

Silver is the second most popular metal for investment, after gold. However, it is relatively inexpensive compared to gold, making it easier for investors to purchase and build up a good portfolio. Silver’s widespread use for industrial purposes, including in the fast-growing solar energy sector, also provides support for the metal’s price.  No doubt silver is less pricey compared to other precious metals but it can present a storage challenge. With an ounce of gold, platinum, or palladium being worth many times more than an ounce of silver, the storage space required for any sum of value in silver will be much larger than that required of the other precious metals. Silver’s dual role as an industrial metal and store of value tends to make it more volatile than the price of gold. The volatility can have a big impact on silver stock prices. In some cases, silver prices can outperform gold during periods of high industrial and investor demand. Silver can be a great way to diversify an investor’s portfolio and hedge against loss. However, the dynamics of supply and demand can result in volatility. Also, it is always advised to compare commissions from different brokers before purchasing. This will ensure investors get the best price possible. Also, many industries such as technology may replace silver in their products with other materials. This would ultimately lower the demand for silver and thus, its price. There are many ways to invest in silver. Investors can purchase:

• Silver coins or silver bars
• Invest in Silver ETFs, ETNs, or Mutual Funds
• Silver Futures Contracts

Here are some of the benefits of investing in silver:

• Silver can be used as an inflation hedge
• Silver is not directly correlated to asset markets
• Investors have the option to own tangible pieces of silver

Here are some of the drawbacks of investing in silver:

• Silver can be a costly asset to purchase
• Silver may be difficult to store
• Tangible assets can get lost or stolen

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Platinum

Platinum is used widely in vehicular catalytic converters and for jewelry. However, it is not as big an investment as gold or silver. Nevertheless, this metal still is considered a good investment.  Historically, its price has been above that of gold, though gold has outperformed platinum in recent years. Platinum’s main advantage is the fact that it isn’t a major investment metal. As a result, it is saved from the marker volatility of the gold and silver faces. In fact, the price of Platinum is comparatively more stable during different market conditions. Platinum became popular due to its unique properties such as durability and corrosion resistance. Many industries quickly adopted this metal. Platinum is used in the watchmaking industry, electronic industry, and automotive industry. For many years, the automobile industry was the primary buyer of this precious metal, finding it the best material for catalytic converters. But recently the automotive industry has turned to palladium as their metal of choice when making catalytic converters. There are many ways to invest in Platinum. Investors can purchase:

• Physical platinum
• Platinum ETFs and stocks
• Digital platinum

Here are some of the benefits of investing in Platinum:

• Due to its volatility, it has the potential to yield higher returns compared to other precious metals
• Investing in platinum can help diversify a long-term portfolio and provide a hedge against inflation
• A good diversification. Investors can minimize risk and achieve a more balanced investment strategy

Here are some of the drawbacks of investing in Platinum:

• Platinum’s high volatility, compared to gold and silver, may lead to larger losses and a more volatile market price
• Platinum’s liquidity is lower than that of gold and silver, making it more challenging to purchase and sell.
• Locating new sources of platinum can also present a challenge due to its rarity.

Platinum is a rare and valuable precious metal with unique properties and diverse investment options. While it offers potential benefits such as higher returns and diversification, it also comes with certain risks, including high volatility and low liquidity. Also, learn:

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Palladium

The characteristics of palladium, and the market for this metal, are more or less similar to those of platinum. Palladium is also used in automotive manufacturing. But its use in making jewelry is less than platinum.  Palladium is a strong, rare, white-colored precious metal that is most commonly used in:

• Catalytic converters in the automotive industry
• Industrial manufacturing and chemical applications
• Jewelry
• Dental cavity fillings, bridges, and crowns
• Ceramic capacitors for computer motherboards or cell phone circuit boards
• Low-emission electric vehicles

Palladium is only found in a few countries. It’s produced in large amounts by Russia and South Africa and only in small quantities in the United States and Canada. The production of palladium is low and the supply of the metal is scarce. This is because it’s mined as a byproduct of other metals like platinum and nickel, so it moves in conjunction with these other metals, reducing its production. Compared with its competitor and substitute, platinum, palladium is facing continued price tension. Even though platinum and palladium are very similar, the latter is often used by precious metals investors to add an extra layer of diversification to their portfolios. Palladium’s demand mainly comes from its use in the automotive sector in its production of the catalytic converter, an exhaust emission control device that minimizes pollutants in cars. Despite the setback the automotive industry has seen as a result of the pandemic, the supply of palladium is on a decline amid continued demand in the global auto market. There are many ways to invest in Palladium. Investors can purchase:

• Palladium-backed Exchange-traded Funds (ETFs)
• palladium stocks by purchasing shares of companies that produce the precious metal
• Palladium Bullion Bars and Coins

Here are some of the benefits of investing in Palladium:

• As a store of value
• High in demand. Many industries are seeking to buy it
• Inflation hedge
• Portfolio diversification

Here are some of the drawbacks of investing in Palladium:

• Palladium is a risky investment because of its low supply and limited mining sources. This means very soon industries will be looking at replacement options making Palladium obsolete.

Palladium differs from gold, silver, and platinum because it’s more volatile, which means its value frequently fluctuates because of the constant supply and demand changes. Investors often prefer palladium because of its rarity and necessity in an environmentally friendly future.

Copper

Copper is not only one of the oldest and most precious metals ever used, but it’s been one of the most popular industrial metals due to its malleability, resistance to corrosion, and conductivity, ranking third behind iron and aluminum. With its wide variety of uses and essential nature for many industries, it’s become a highly sought-after commodity by investors. The market for copper is diverse, boasting a large number of industrial, manufacturing, and decorative uses. The demand for copper is ever-increasing and it, like other precious metals, is in limited supply. Although copper is often overlooked as an investment compared to gold and silver, an increasing number of investors are starting to buy copper bullion coins and bars to hedge their portfolios against further currency devaluation. There are many ways to invest in copper. Investors can purchase:

• Exchange-traded funds (ETFs)
• Futures
• Mining Company Stocks
• Copper bullion bars and coins

Here are some of the benefits of investing in copper:

• Many options to invest in copper
• A good inflation hedge
• Copper is priced relatively competitively against other metals like gold and silver. This makes it a more affordable option
• Continuously increasing uses of copper make it a high-demand stock

Here are some of the drawbacks of investing in copper:

• Potential for both short-term and long-term price fluctuation
• Copper doesn’t have the same level of exposure as some other metals. This can make it more difficult to find information and resources on investing in copper
• The cost of storing physical copper 

Investing in copper is a good idea because it’s a metal used in various industries, including construction and electrical equipment manufacturing. Additionally, copper is a scarce resource, so its price will likely increase as demand grows. However, there are also risks associated with investing in copper. Checkout:

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Rhodium

Rhodium again is one of the rare metals found on Earth. However, its properties are not like gold or silver. It is more valued for its use at the industrial level. Almost 80 % of the current Rhodium in use is sourced from South Africa.   Rhodium is one of the most misunderstood of all the precious metals. Its primary use in society is in catalytic converters. Very resistant to corrosion, rhodium looks a lot like silver in its natural state but has a brittle, almost glass-like consistency Rhodium is majorly used to make automotive catalytic converters, which control exhaust emissions. It makes up the bulk of the demand. However, Rhodium is a corrosion-resistant metal that is also used as an electrical contact material.  The demand for Rhodium is going strong. But Rhodium is only 10% of the metal balance in the best deposits on earth. It is produced as a byproduct of nickel and platinum mines. But what makes this a rare metal is no matter how the demand, there just isn’t enough rhodium to be mined. There are many ways to invest in Rhodium. Investors can purchase:

• Rhodium bars
• Rhodium coins
• Rhodium-backed stablecoins
• ETFs

One of the main disadvantages of investing in rhodium is price volatility. In the past years, it has hit a high of $ 10,000 per ounce and then dropped to under $ 1,000 per ounce. Also read:

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Conclusion Investing in precious metals is challenging and not everyone’s cup of tea. Investors should be very clear about their investment purpose like a hedge against inflation, to store value, diversify your portfolio, or profit from higher prices. After that, they need to pick the right metal commodity that sits well with their investment intent.  Each option has its share of pros, cons, and risks. It is very important to be aware of all the challenges they will be experiencing with this line of investment. Investors need to carefully consider whether they want to invest in metal commodities, and, if they do, fully understand the risks associated with their chosen investment. Checkout:

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