Gold & Precious Metals: Why They're a Store of Value

Why gold?

Gold is rare, divisible, portable, doesn't tarnish and is recognized everywhere. Those properties made it humanity's first money and the modern era's most durable store of value. When inflation runs high, currencies weaken or geopolitical tensions rise, investors rotate into gold.

What drives the gold price?

• Real interest rates: Falling real yields make gold more attractive (it pays no yield of its own).
• The US dollar: Gold is priced in dollars; a weaker dollar tends to lift gold.
• Inflation expectations: Higher expected inflation increases gold demand.
• Central bank purchases: Especially China, Russia and India adding to reserves.
• Geopolitical risk: Wars and crises drive safe-haven demand.

Silver, platinum, palladium

• Silver: Both a precious and an industrial metal (solar panels, electronics). More volatile than gold.
• Platinum: Used in autocatalysts, jewelry and industry. Very limited supply.
• Palladium: Mostly used in catalytic converters for gasoline vehicles; highly sensitive to automotive demand.

Gold's role in a portfolio

Even a classic 60/40 portfolio can benefit from a small gold allocation (say 5–10%) as diversification. Gold often moves opposite to stocks during drawdowns and acts as a kind of insurance. However, it pays no dividend or interest — the only return comes from price appreciation.

Ways to invest

• Physical gold (bars, coins, grams)
• Bank gold accounts
• Gold ETFs (e.g. GLD, IAU)
• Gold futures
• Shares in gold-mining companies

Live prices

Track gold, silver and platinum prices live on the NexPrices Commodities screen.