Precious metals investing explained: Gold, silver & more

From ancient civilisations to modern central banks, precious metals have held enduring value across cultures and centuries. In times marked by economic volatility and inflation, gold and its metallic peers are re-emerging as anchors of financial security.

But what makes precious metals investing a compelling choice this year? And how can beginners enter the market wisely? In this guide, you’ll discover how precious metals investing works, why investors turn to it in times of uncertainty, and what options are available today.

What are precious metals, and why do they matter?

Precious metals are rare, naturally occurring elements with high economic and cultural value. They don’t rust, corrode or default. Instead, they serve as long-term stores of wealth and offer protection in times of financial stress.

In investment terms, they are typically seen as:

• Gold: A traditional safe-haven and store of value

• Silver: Combines monetary and industrial utility

• Platinum: Used heavily in industry and jewellery

• Palladium: A high-demand metal in automotive technology

Historically, gold and silver were used as money. Gold-backed currencies shaped global finance for centuries.

Over 35,000 tonnes of gold are held by central banks globally – one-fifth of all gold ever mined. That alone signals how seriously institutions still take these metals.

Breaking down the big four: Gold, silver, platinum, palladium

Gold: The monetary metal

Gold is the cornerstone of most precious metals portfolios. In 2024, it hit record highs above $2,700 per ounce amid inflation, war, and rate cuts. It is highly liquid, exempt from VAT in the EU, and easily traded physically or digitally.

Gold’s unique strengths:

• Resilient during economic crises (e.g. 2008, 2020, 2022)

• Highly liquid and globally accepted

• Easy to buy via bars, coins, or platforms like Bitpanda

Silver: The versatile metal

Silver is both an investment and an industrial asset. Over half its demand comes from applications like solar panels and electronics. Global silver demand hit a new record of 1.2 billion ounces in 2024, with a sustained supply deficit.

Key characteristics:

• Dual-use asset (industrial + monetary)

• Higher price swings than gold

• Subject to VAT in the EU, unless vaulted

Platinum: The clean tech metal

Platinum is rarer than gold and silver but trades at lower prices. Around 40% of its demand comes from catalytic converters in diesel vehicles. It’s also gaining attention for its role in hydrogen energy systems.

Key strengths:

• Used in jewellery, the auto industry, and fuel cell tech

• Smaller, thinner investment market

• VAT applies in most EU countries unless the metal is vaulted

Palladium: High demand, high risk

Palladium is an industrial specialist, with approximately 80% of demand coming from catalytic converters in petrol vehicles. Prices soared above $3,000 per ounce in 2022 but have since corrected.

At a glance:

• Sensitive to auto trends (and EV disruption)

• Smaller retail investor base

• Often used for speculation or diversification

How to invest in precious metals: From coins to digital gold

There’s no one-size-fits-all approach. Here are the most common investment methods:

1. Physical bullion (bars and coins)

This is the traditional form: buy actual gold, silver, platinum or palladium in bar or coin form.

• Pros: Tangible ownership; no counterparty risk; VAT-free for gold

• Cons: Storage, insurance, dealer premiums

Common choices include Gold Britannias, Vienna Philharmonics, and silver bullion coins. Silver and platinum typically carry 19–20% VAT unless they are vaulted.

2. ETFs and ETCs (Exchange-Traded Commodities

Publicly traded funds that track the price of a metal, often backed by physical holdings.

• Pros: Highly liquid, low management fees, easy access

• Cons: No physical ownership; some counterparty exposure

Popular examples include SPDR Gold Shares (GLD) and iShares Silver Trust (SLV).

3. Digital metals 

Platforms like Bitpanda let you buy and sell metals online, backed by real, vaulted assets.

• Pros: Fractional ownership; 24/7 trading; VAT-free if vaulted in Switzerland

• Cons: Platform-dependent; no physical delivery

Investing in gold via Bitpanda is a modern alternative for mobile-first investors.

4. Mining stocks and funds

Invest in companies that produce precious metals. This adds equity risk but can offer leveraged upside.

• Pros: Potential dividends; leveraged upside

• Cons: Equity risk; not direct exposure to metal prices

Funds like GDX or SIL track baskets of miners for broader exposure.

What are the pros and cons of investing in precious metals? 

Like any asset class, precious metals come with both strengths and limitations. Here’s a quick overview of the key advantages and drawbacks to consider:

Pros

• Safe-haven asset: Protects wealth during inflation or crisis

• No credit risk: Physical metals are not tied to financial institutions

• Portfolio diversification: Low correlation to stocks and bonds

• Globally liquid: Recognised and traded worldwide

• Inflation hedge: Maintains purchasing power over time

Cons

• No yield or dividends: Metals don’t generate income

• Storage & insurance costs: Physical metals require safekeeping

• Tax complications: VAT and capital gains laws vary in Europe (EU VAT directive)

• Volatility: Silver and palladium, in particular, can be very price-sensitive

• Complex resale logistics: Selling physical metals may involve dealer spreads or documentation

Final thoughts: Anchoring your portfolio in hard assets

Precious metals are about resilience, not quick wins. Whether you're buying coins, ETFs, or digital gold, success depends on understanding what you own and why.

With Bitpanda, investors can enjoy the security of real, insured metal stored VAT-free in Swiss vaults – starting from just €1 and available 24/7. It's a modern, flexible way to own precious metals without traditional barriers.

Ready to get started? Bitpanda makes it easy to invest in gold, silver, platinum and palladium – anytime, from anywhere.