Harvested from deep inside the earth, both precious metals and gems have existed in tandem for as long as we’ve been able to extract them.
So, how are precious metals similar to gems? These elemental cousins share many properties that have made them valuable throughout history.
Mother Nature’s gifts have not only adorned the necks and wrists of royalty, both have been used to help innovate technology and advance mankind.
In our modern world, we still look to gems and precious metals for their beauty, but some have found ever-expanding and indispensable technological value.
As investment vehicles, gems and precious metals can both be great choices. However, they have different sets of values and investors typically look upon them in varied ways.
Whether you are looking to hold the stones, collect the metals as coins and bullion, or own precious metals in an IRA, we will help you understand those differences. We will help you discern how one or both may help you reach your financial goals.
The Key Differences Between Precious Metals and Gems
Precious metals and gems both originate from the earth’s crust, but that is mostly where their similarities end.
They possess different structural properties and are used differently in industry and manufacturing.
What is Considered a Precious Metal
Precious metals are chemically inert metals that are rare. They derive their value from scarcity, manufacturing and industrial usefulness, and as jewelry.
Precious metals are typically non-corrosive, less reactive, and more highly conductive than other elements. Most precious metals are also very malleable and are able to be shaped into different forms.
In general, the four most utilized precious metals are:
All four precious metals are well known for their color and brilliance, making them ideal for jewelry and decorative purposes.
Modern technology has grown dependent on precious metals. Solar panels, cell phones, computers, televisions, most electrical tech, and automotive tech—catalytic converters—need one of the precious metals to operate.
Because precious metals supply is very limited and demand is very high, many investors have turned to precious metals as a store of wealth. During inflationary times, investors have found them—particularly gold and silver—to be a great way to protect their wealth and retain purchasing power.
They offer investors a tangible asset that is non-correlated to the stock market.
History has shown that precious metals often move up in value during the most economically tumultuous times. Because of this, they are often used as “safe haven” assets, and are a trusted and safe place for investors to park their money.
What is Considered a Gem
Gemstones are minerals that are durable, beautiful, and rare.
They are usually cut, shaped, polished, and used in jewelry and as collectibles.
Among the most popular gemstones are the:
Gems typically derive their value from their scarcity and also their perfection as a stone. The closer to perfect a stone is, the more it’s worth.
Some gems, such as diamonds, are also widely used in industry. Diamonds are the hardest natural substance on earth, and are used to grind other materials.
How Gems and Precious Metals are Similar
Knowing that one is a stone, and one is a metal, you’re probably asking, how are gems and precious metals similar?
Precious metals and gems are distant cousins. Both are rare, both are durable, and both are subsets of minerals.
They’ve been extracted from the earth’s core and have been assigned value throughout history.
Precious metals and gemstones are like peanut butter and jelly—they work great together.
As jewelry, beautiful, colorful gemstones, and even the most colorless diamonds need a setting. Precious metals are usually the go-to choice for ring, necklace, and earring settings for rare gems.
Setting one expensive member of the mineral family with another expensive member leads to jewelry pieces that last for centuries.
Gold seems to look good with everything. The brilliance of a red ruby set on a backdrop of yellow gold can be breathtaking.
Blue sapphires and green emeralds—set on a clean backdrop of white gold, platinum, palladium or even silver—presents as a regal choice.
Diamonds can be beautiful with both the yellow metal and the white metals. All a diamond needs is someone to wear it.
One major commonality between gems and precious metals is their durability.
While their beauty is easy to see, both groups’ ascension may be attributed to the fact that they can last for centuries without eroding or breaking.
Without major force being enacted on a gemstone or a precious metal, that object will be the same in 1000 years as it is today.
Diamonds are so hard and durable that the only thing that can cut a diamond is a diamond.
Symbolism and Significance
From associating diamonds as a girl’s best friend to seeing Dorothy clicking her ruby slippers, humans seem to have a deep rooted connection to precious metals and gemstones.
Gold can symbolize many things, but the root message of gold is power, success, and victory. Kings and queens wear gold crowns. If something is considered the best in class, it is the gold standard. Victorious olympians receive gold medals for first place and silver medals for second.
Gold is the standard bearer.
Diamonds are forever. Beautiful when the light hits it, everlasting, and forged from carbon, diamonds have always captured the imagination. The eternal symbol of everlasting love is placed on a bride’s finger, cementing a forever bond.
Used together, a gold and diamond ring signals to the world that victory is had in a relationship that will last as long as those minerals. Forever.
The recording industry issues a platinum plaque when a song sells 1,000,000 copies. This homage to the beautiful white metal began when platinum cost more than gold. The industry also issues a diamond plaque when sales reach 10,000,000—an extremely rare feat—the hardest.
Investment and Financial Value
How are gems and precious metals similar for investment purposes?
Both precious metals and gems can be used as investment vehicles.
High-value jewelry pieces usually involve a combination of the two. It is not unusual for prized or historic pieces to sell for tens of millions of dollars. Rare colored, flawless diamonds—set in gold, white gold, or platinum—have recorded the highest sales prices in history.
Gems can also be purchased individually. They are priced according to the four C’s:
Cut is the style that a jeweler makes for the gem. Clarity measures how clear or flawless the inside of the gem is. Carat refers to the weight of the gem. Color rating is based on the exclusiveness and rarity of that color in nature.
You can also purchase precious metals in pieces.
Investors often buy coins, bullion bars, and generic rounds and lock them away for safekeeping. Gold, silver, platinum, and palladium are all available.
Metals are typically sold according to weight. You decide your investment amount, choose your metals, and purchase them per ounce.
Many of today’s investors choose to own precious metals inside of an individual retirement account.
Commonly known as a Gold IRA, Silver IRA, or Precious Metals IRA, these self-directed IRA accounts allow for you to purchase and store approved metals inside the safety of your IRA account.
Eligible metals must meet the IRS’ strict guidelines for quality, purity, and origin.
Whether you already have a traditional, a Roth, or a Simplified Employee Pension (SEP) IRA, you can easily convert it to a self-directed precious metals IRA.
If you are 59 ½ and have a 401(k), or if you have a 401(k) from a previous employer, you can roll over that plan—tax-free and penalty free—into a precious metals IRA.
The account executives at Advantage Gold are available to give you more details and walk you through the process to get started.
Precious Metal vs Gem Investment: What’s Right For You?
Precious metals and gemstones can both be great investments. You must analyze your investment needs, goals, and timelines to decide if one or both are good for you.
If you are a buy and hold investor, both may fit you perfectly. The set-it-and-forget-it methodology easily applies to metals and gems.
Buy them and store them safely. When you’re ready to sell, find a buyer and complete the transaction.
Precious metals offer one major aspect that gems do not—a very transparent marketplace.
The trading price of precious metals is readily available, 24 hours a day, 365 days a year. With a few clicks online, you can find up-to-the-minute pricing on gold, silver, platinum and palladium.
The gem market is a bit more closed. It is more subjective, and the price that one jeweler may buy or sell for isn’t necessarily the price at which another will transact.
There is no set pricing per carat, per color, per clarity, per cut. While this should by no means be a deal-breaker, you should consider it when evaluating your possible investment.
Precious metals offer a built in marketplace when you establish a precious metals IRA with a reputable firm, such as Advantage Gold.
Advantage Gold will not only walk you through the process of establishing your account, but will educate you on and sell you the eligible metals that you choose.
Advantage Gold’s marketplace is two-way. Our established buy-back program is available for clients, and you can sell your metals back to us when you’re ready to do so.
Learn More About Precious Metal Investment Today
It may seem like a lot of information to digest, but precious metals investment is easy.
In or out of an individual retirement account, you can own gold, silver, platinum and palladium, in no time at all.
Our trained professionals at Advantage Gold are here to answer your questions and walk you through the process.
Call us today, or clink the link, send us your information, and we’ll contact you as soon as possible.
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