Tips on investing in "underground mines" of silver, platinum and palladium

(Dan Tri) - As gold prices continue to reach new heights, many investors are quietly turning to silver, platinum, and palladium. These "underground mines" are full of potential but also carry significant risks. What is the key to exploiting them?

When inflation fears persist and the stock market is always fraught with unexpected risks, investors often look for a safe haven that can retain value and even break out.

Alongside gold investments, a quiet but strong trend is taking place, which is that professional investors are shifting their attention to silver, platinum and palladium.

The new "golden triangle" of investors

Eric Croak, president of Croak Capital, describes silver, platinum and palladium as a “decorrelated triangle.” This means they tend to move out of phase with traditional assets like stocks and bonds. When the stock market is turbulent, these metals can be a “lifesaver.”

Croak recommends that investors consider allocating about 3-5% of their portfolio to this group of metals if they already have a basic investment channel. But the three cannot be lumped together because each metal has its own story with unique risks and potential.

While gold is almost exclusively for jewelry and financial purposes, the value of silver, platinum and palladium is shaped by the flow of economic production (Illustration: Yahoo Finance).

Silver

Both an investment metal and an indispensable industrial raw material, silver is present in electronic devices, solar panels and auto parts. Because of this dual role, silver prices are not only affected by market sentiment but also depend heavily on global manufacturing demand.

However, the downside of silver is that it is less liquid and has more price volatility than gold, making it more difficult to sell quickly.

Platinum

Rarer than gold and silver, platinum is best known for its role in jewelry and in the production of catalytic converters for cars, which help reduce harmful emissions.

With limited supply, mainly from South Africa, any disruption could cause a sharp swing in platinum prices. Eric Croak said platinum is a “stable and under-the-radar” investment with long-term potential tied to the global energy transition.

Palladium

Relative to platinum but even rarer, palladium has exceptional heat resistance. It is also a core component in catalytic converters. Palladium prices depend almost entirely on the auto industry and are highly sensitive to geopolitical risks.

It is the most volatile of the three “underground” metals, with less liquidity than platinum, so Croak sees it as a short-term, high-risk investment option for seasoned traders who are “resilient enough to tolerate volatility.”

Choose the right "pick and shovel" for mining

To invest in these metals, investors have two main paths, which are digital or physical ownership.

Digital (indirect) investing: This form is quite modern and convenient, including ETFs that allow you to invest in one or more metals at the same time, mining stocks - investing in mining companies such as Hecla Mining Company (specializing in silver) or Sibanye-Stillwater (mining platinum, palladium and gold) to benefit from metal prices and futures contracts - for professional investors with high leverage and high risk.

Physical (direct) ownership: This traditional route involves purchasing the metal in the form of bars, coins or jewelry. The biggest advantage is the elimination of third-party risk. However, investors will face storage costs, insurance and theft risks, as well as difficulty selling quickly at a good price when the market is volatile.

Long term accumulation or short term surfing?

Your investment goals will determine how you approach this “mine.”

For long-term investors looking for diversification and a hedge against inflation, allocating a small portion of their portfolio (3-5%) to silver and platinum is a sensible strategy. Their low correlation with the stock market provides a necessary balance, especially during times of economic uncertainty.

On the contrary, short-term trading, especially with palladium, is considered a risky game. Investing requires investors to have a deep understanding of the market, a high risk tolerance and a strong mentality. Profits can be huge, but losses can also happen quickly.

Beyond the shadow of gold, the world of precious metals has many attractive options. Silver, platinum and palladium are not only defensive assets, but also gateways to investing in the future of industry and technology.

Understanding the nature, potential and risks of each type will be the compass that helps investors successfully exploit these valuable "underground mines".

Source: https://dantri.com.vn/kinh-doanh/mach-nuoc-cach-dau-tu-mo-ngam-bac-bach-kim-va-palladium-20251011190552985.htm