Talking Points: Precious Metals and Their Uses Types of Precious Metals Accounts Physical Versus Paper Leading Indicators Lagging Indicators Gold and Silver Charts

A precious metal is a rare, naturally occurring metallic chemical element of high economic value. Chemically, the precious metals are less reactive than most elements, have high luster, are softer and more ductile, and have higher melting points than other metals. Historically, precious metals were important as currency, but are now regarded mainly as investment and industrial commodities. The best-known precious metals are the coinage metals gold and silver. While both have industrial uses, they are better known for their uses in art, jewelry and coinage. Other precious metals include the platinum group metals: rhodium, palladium, iridium, and platinum, of which platinum is the most widely traded. The demand for precious metals is driven not only by their practical use, but also by their role as investments and a store of value. Historically, precious metals have commanded much higher prices than common industrial metals.

Gold is a chemical element with the symbol Au (from Latin: aurum) and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Gold has been a valuable and highly sought-after precious metal for coinage, jewelry, and other arts since long before the beginning of recorded history. Gold standards have been the most common basis for monetary policies throughout human history, being widely supplanted by fiat currency only in the late 20th century. The world consumption of new gold produced is about 50% in jewelry, 40% in investments, and 10% in industry. Besides its widespread monetary and symbolic functions, gold has many practical uses in dentistry, electronics, and other fields. Its high malleability, ductility, resistance to corrosion and most other chemical reactions, and conductivity of electricity led to many uses of gold, including electric wiring, colored-glass production and even gold leaf eating. A total of 165,000 tons of gold have been mined in human history, as of This is roughly equivalent to 5.3 billion troy ounces

Silver is a metallic chemical element with the chemical symbol Ag (from Latin argentum) and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal. Silver metal is used in electrical contacts and conductors, in mirrors and in catalysis of chemical reactions. Its compounds are used in photographic film, and dilute silver nitrate solutions and other silver compounds are used as disinfectants and microbiocides. Silver has also long been valued as a precious metal, and it is used to make ornaments, jewelry, high-value tableware, utensils (hence the term silverware), and currency coins. In 2010, 14.3% was used for photography, while 20.03% was used in jewelry, 60.17% for industrial uses, and only 5.5% for coins and medals. Most silver is produced as a byproduct of copper, gold, lead, and zinc refining.

A metal is deemed to be precious if it is rare. The discovery of new sources of ore or improvements in mining or refining processes may cause the value of a precious metal to diminish. Conversely, supply squeezes caused by new industrial demand can make the price of a precious metal rise drastically. The status of a "precious" metal can also be determined by high demand or market value. Precious metals in bulk form are known as bullion, and are traded on commodity markets. The defining attribute of bullion is that it is valued by its mass and purity rather than by a face value as money. Many nations mint bullion coins. Although nominally issued as legal tender, these coins' face value as currency is far below that of their value as bullion. For instance, Canada mints a gold bullion coin (the Gold Maple Leaf) at a face value of $50 containing one troy ounce ( g) of gold— as of May 2011, this coin is worth about $1,500 CAD as bullion. Because of their ability to be used as a store of value, gold and silver, and sometimes other precious metals, are often seen as hedges against both inflation and economic downturn.

Precious Metals Mutual Funds Mining Stocks Exchange Traded Funds Retail Physical Bullion Purchase Options and Futures Contracts Precious Metals Certificates Speculative Physical Bullion Investment

A leading indicator is an economic condition that changes and warrants a response from the market for a good or service. These are used to form trends since they precede the changes in price. Since Precious Metals are considered to be a hedge against inflation and a currency equivalent, like most commodities the leading indicator for precious metals is the nominal value of currency. One measure of the nominal value of US currency is the US Dollar Index, which measures the US Dollar versus a basket of the 8 other major world currencies. Other indicators of Dollar Strength include the prevailing interest rates, coupon rates for Treasury Securities, the Consumer Price Index (as well as other purchasing parody measures), and the exchange rate of the US Dollar to individual foreign currencies.