What Are Precious Metals?
Gold, silver and platinum are naturally occurring metals valued for their physical properties and a range of practical uses. They can also be bought and owned as physical bullion. This lesson introduces the three metals and the terms you will encounter throughout the course.
What makes a metal “precious”?
Precious metals are metals valued for characteristics such as their relative scarcity, durability and usefulness. Gold, silver and platinum each have their own properties, uses and markets. They are often discussed together, but they do not all respond to the same forces in the same way.
People use precious metals in jewellery and manufactured products. They also buy them in investment forms such as bullion bars and coins. The market value of a metal can change over time, so being precious does not mean its price will always rise.
Meet the three metals
What is bullion?
Bullion is precious metal held primarily for its metal content. Bars and many investment coins are common bullion products. Their weight and purity help establish how much precious metal they contain.
A piece of jewellery can contain precious metal, but its price may also reflect design, gemstones, craftsmanship and retail costs. That is why a jewellery price should not be treated as the same thing as the value of its metal content.
How is precious metal measured?
Bullion is commonly measured in grams and troy ounces. One troy ounce is approximately 31.1035 grams. Purity, sometimes called fineness, tells you what proportion of a product is the precious metal named on it.
Simple example: A product's total weight and its pure metal content are related, but they are not always identical. Check both the weight and purity when comparing products.
What does it mean to own physical metal?
Physical metal can be held by you or stored on your behalf. If a provider stores it, the details of the arrangement matter: what metal you own, how it is recorded, where it is stored, and the conditions for selling or taking delivery.
Later lessons will explain the difference between allocated and unallocated arrangements, along with storage, insurance and redemption. For now, the key question is simple: what exactly do I own when I buy?
What comes next?
We will look at each metal in more detail, beginning with gold. Then we will cover weights and purity, spot prices, physical prices and the practical details of ownership.