Gold is an essential part of any investment portfolio as a hedge and a de-risking element. But one can also include other precious metals, like silver and platinum, which may serve the same purpose even though they are also used in industrial manufacturing.
Some analysts, however, caution. "When markets fall, investors move their funds to gold as it is a safe haven asset. However, one should look at platinum and silver from a returns perspective. Silver has a high level of correlation with gold, but the metal is much more volatile than gold and so the risks and returns are also higher," said Anil Rego, CEO, Right Horizons.
At present, in the case of platinum and silver their industrial usage is much higher than their investment consumption. Short-term investors, therefore, have to understand and monitor the industrial demand-supply equations in the metals and the macroeconomic factors that impact industrial production.
In case of platinum, over 60% goes for industrial purposes and a major chunk of it to the automotive industry. Obviously, it is a metal of good times and can give higher returns when the global economy and auto industry revive, said Tapan Trivedi, senior analyst, JRG Wealth Management. Platinum can remain in the portfolio for a longer term. . .View Full Article