How to invest in precious metals for beginners in 2024

Use this guide to learn about precious metals investing and follow a step-by-step guide on how to invest in precious metals online.
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Updated: Mar 15, 2024
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This page explains how to invest in precious metal commodities online in 2024. Learn about the different precious metals investing methods, what impacts their prices, and why they might be a good addition to your portfolio.

What are metal commodities?

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They can be natural resources that are mined or materials that are produced by a man-made process that combines different elements together.

There are two types of metal commodities: precious metals like gold, silver, and platinum, and industrial metals like steel, copper, and aluminium. Precious metals are desirable objects and can be used as a store of value, while industrial metals tend to be used to make things.

Why invest in precious metals?

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Metals commodities offer a way to take advantage of the world around us. Their performance is often very different to the stock market, as prices are affected by different factors and often have a much more global reach. 

Here are some of the reasons metals investing is popular and why you might want to get involved.

  • Metals commodities offer protection against inflation. Many people use precious metals as a store of value and a way to maintain the pricing power of their money. Gold, in particular, is traditionally used as a hedge against inflation.
  • It’s a way to diversify your investment portfolio. Metal commodity prices react differently to economic stimuli compared to stocks and currencies. By including all of them in your portfolio you can protect yourself against all economic environments.
  • There’s always demand for metal products. Metals can be both desirable and vital for construction projects, as well as in manufacturing things like semiconductors, which play an important role in modern computing. That demand even holds up during recessions, which helps to protect your investment.
  • To speculate on future price changes. Trading gold and other precious metals is a way to make money. Futures markets offer a chance to predict the performance of a particular metal and how its price might change over the next few months.

How to invest in precious metals online – a step-by-step guide

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Investing in precious metals is a simple process. Before you begin, you’ll need to register with a trusted online broker to access the precious metals market. Follow the steps below to learn how to invest in precious metals.

Step 1. Open a precious metals investment account

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Choose an online broker that offers a way to invest in the precious metals market. We recommend eToro as the best precious metals investing platform. You can invest in a range of precious metals stocks, precious metals ETFs, and precious metals mutual funds. 

If you’re interested in specific precious metal investments then a specialised broker may be the best option for you. Use our guides to find the best gold brokers, best silver brokers, best platinum brokers, best palladium brokers, or the best copper brokers. 

Step 2. Choose your precious metals investment vehicle

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You can invest in precious metals using various methods. Most investors prefer to invest in precious metals stocks, ETFs, or funds. You can also directly invest in precious metals through futures contracts or even physical bars or coins. Our guide below explains more about each option. 

Step 3. Make your in precious metals investment

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Once you decide how to invest your money into precious metals, it’s time to make your investment. To do this, simply log into your online brokerage account and use the search bar to find your chosen investment. For example, if you’re planning to invest in a precious metals ETF, just type its name or ticker symbol and you’ll be taken to its trading page. 

Fill out your order details on the trading page and hit the buy button. You’ll usually be able to decide how many shares you want to buy if using stocks, ETFs, or funds. Alternatively, you can enter a dollar amount and the brokerage platform will take care of the rest. 

Step 4. Monitor your investments

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Regularly review your investment portfolio and its performance. Keep an eye on the precious metals price to stay updated with the latest changes. If its price drops, you could use it as an opportunity to add to your investment. If it rises, you may want to consider taking some profit. 

Where can I start investing in precious metals?

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To invest in precious metals, you need to register with a precious metals investing platform. These are the best commodity brokers, ranked by our team of commodity experts according to their value for money, user experience, and security features.

Sort by:

1
Min. Deposit
£ 8
Best offer
User Score
9.9
Up to $240 bonus!
Award-winning trading platform
Regulated and trusted broker worldwide
Start Trading
Payment Methods:
Bank Transfer, Debit Card, PayPal, Credit Card, Wire Transfer
Full Regulations:
CySEC, FCA

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

2
Min. Deposit
£ 100
Best offer
User Score
9.9
Trade +2000 CFDs on Shares, Forex, Indices, Crypto, Options, Commodities & more
Unlimited risk-free Demo Account
0 commissions & attractive spreads
Start Trading
Payment Methods:
Bank Transfer, Debit Card, PayPal, Credit Card, Visa, Mastercard, American Express, Trustly, Apple Pay, Google Pay, Discover, Bank Transfer: SEPA, Bank Transfer: FPS, skrill
Full Regulations:
ASIC, FCA, FSA, MAS, CySEC #250/14

CFD service. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

3
Min. Deposit
£ 0
Best offer
User Score
9.2
World's biggest online bullion market
High-security vaults based Zurich, London, Toronto, Singapore and New York
Next-day withdrawals
Start Trading
Payment Methods:
Full Regulations:

How can I invest in precious metals?

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There are several options available, ranging from investing in precious metal stocks to buying bullion bars or coins. The right approach depends on your personal budget, risk tolerance, and timeline for seeing returns. Here’s a look at the various ways you can invest in metals online.

Buy precious metals stocks 

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You can buy stock in companies that have exposure to the metals industry. These could be businesses involved in mining, manufacturing related goods, or transporting those products around. Gold and silver are most common precious metal stocks and our guides on the best gold stocks and best silver stocks can help you decide which companies to invest in. 

However, the industry is vast so you’re not just limited to gold and silver when it comes to buying metals stocks. Rare metals, industrial metal, and physical metals are also options. Consider the best copper stocks, lithium stocks, steel stocks, or uranium stocks for precious metals investing via the stock market. 

Some of the metals stocks you might want to consider are:

Invest in precious metals ETFs

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ETFs, or exchange-traded funds, are investment vehicles that track the performance of a particular asset, industry, or index. You buy shares in the best metals ETF to gain exposure to the metals sector.

Some ETFs track the price of a specific commodity, such as gold. Others own a batch of related metals commodities or track an index of metals stocks and so allow you to invest in the sector as a whole.

ETFs generally have a low cost of entry, so you can invest with a small amount of money, while you can invest through a regular trading platform, so they’re accessible to everyone.

Here are some popular exchange-traded funds that invest in the metals sector:

  • iShares MSCI Global Metals & Mining Producers ETF (NYSEMRKT:PICK)
  • abrdn Physical Gold Shares ETF (NYSEARCA:SGOL)

Invest in precious metals funds or trusts

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Mutual funds and trusts are actively managed investments, where a fund manager pools together money from lots of different people and decides what to invest in. Each fund has a defined goal, such as to outperform a particular metals index over a period of time.

This type of investment normally requires each person to put up a substantial minimum deposit in order to join. There may also be a limited number of places available, so you can only buy shares in the fund when someone else wants to sell their spot.

Here are some of the best metals funds to invest in:

  • VanEck International Investors Gold Fund (INIVX)
  • Franklin Gold and Precious Metals Fund (FKRCX)

Trade precious metals futures contracts

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Futures contracts are the most common way for experts to trade precious metals commodities. With futures, you can speculate on metals commodity price changes, and predict whether you think they’re going to rise or fall.

You need plenty of experience and industry knowledge to understand the futures market and trade it successfully. Some metals markets can be highly illiquid and have large spreads, particularly during periods of price volatility. 

Here are some popular metals commodities that you might want to trade.

Buy precious metal bars or coins

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It’s possible to buy physical precious metals directly to take ownership of bars, bullion, or coins. This gives you ownership of something tangible and is a way to store your money without putting it into a bank.

The vast majority of people who buy precious metals do so by buying gold coins or bullion bars. You will need to use an online brokerage firm to buy physical precious metals and it’s usually helpful to find a specialist platform before making a purchase. 

Here are some of the physical metals you can buy:

What metals markets can I invest in? 

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The most popular options are the precious metals, gold and silver. There are other options outside those two, though. Below are some of the best precious and non-precious metals you can invest in. 

  • Aluminium is the most abundant metal in the earth’s crust. It is considered an industrial metal as opposed to a precious metal because it is easier to extract compared to commodities like platinum and palladium. You can invest in aluminium through a range of ETFs, stocks, and funds.  
  • Cobalt is a silvery-blue metal that is crucial in the production of lithium-ion batteries. These batteries power many of the world’s electric vehicles and electronic devices. If you invest in cobalt you’ll gain exposure to a metal that is considered a critical mineral with a wide range of uses including manufacturing magnets, superalloys, and catalytic converters. 
  • Copper is a centuries-old metal that is reddish-orange in colour. It’s one of the world’s most widely used metals and is a good conductor of heat and electricity making it an essential material for many applications, especially in the construction industry. Copper is considered a precious metal and its price is correlated with economic growth. 
  • Gold is the best known precious metal in the world. Its a yellow metal that is valued for its beauty, scarcity, and resistance to corrosion. Gold has been used as a form of currency for many centuries, although these days is considered a safe-haven asset that protects investors from the negative effects of inflation. You can buy gold in its physical form or digital. 
  • Lithium is another metal crucial in the production of lithium-ion batteries. It is the lightest metal in the earth’s crust and is a key component in the development of electric vehicles, smartphones, and other electronic devices. You can invest in lithium to gain exposure to a critical mineral with prices expected to increase in the future. 
  • Nickel is a non-precious metal and is used in a variety of industrial applications. It is used in the production of stainless steel, batteries, and catalysts. The price of nickel tends to be volatile compared to other metals. If you invest in nickel, it is best to use an exchange traded fund, stocks, or mutual funds. 
  • Palladium is a precious metal like gold, silver, and platinum. Used in catalytic converters, jewellery, and electronics, palladium is also used in dental implants and medical devices. You can invest in palladium using stocks, ETFs, funds, CFDs, and futures contracts. You can also buy palladium bullion bars and coins. 
  • Platinum is one of the most precious and rare metals on earth. Used in a range of applications including catalytic converters, jewellery, dentistry, and electronics, it is considered a safe haven asset like gold. Just like other precious metals, you can invest in platinum using stocks, ETFs, funds, CFDs, and futures. 
  • Silver is the second most popular precious metal in the world and is often referred to as gold’s cousin. However, unlike gold, silver is much cheaper and has a wider range of uses including electronics, jewellery, silverware, and photography. Thanks to this, if you invest in silver you’ll have exposure to multiple growing industries. 

Is investing in precious metals safe?

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Metals markets can be dangerous to newcomers who don’t understand them properly. The forces that affect prices can have a sudden and dramatic impact, while positions that use leverage are at risk of liquidation if markets move against you.

Consider these risks before you start investing in metals and use them to influence how and when you invest.

  • Weather and natural disasters can impact metal prices. Most metals have to be mined, or some part of the compound has to be extracted from the ground. These mines and quarries are at the whims of the climate, while weather conditions can also affect supply chains. 
  • Geopolitical events play a large role in metals prices. Wars, sanctions, and even local industrial disputes can suddenly cause swings in metal prices. While metals are less susceptible to this type of thing than agricultural or energy commodities, it’s still something that can be hard to predict and have a large effect on your bottom line.
  • Metals investing requires intimate knowledge of the markets. Industrial metals in particular are fairly niche markets, where the traders involved are intimately associated with the industry. You can be caught out if you don’t know what you’re doing by people who have lots of knowledge and experience.
  • Commodity markets are often cyclical. Metals can be inversely correlated to the economy, so when times are tough the prices go up, while during the boom times, their prices fall.

How much does precious metals investing cost?

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The costs associated with investing in precious metals will vary depending on the investment method you choose, although it is relatively inexpensive. 

When buying precious metals stocks, ETFs, mutual funds, futures, or CFDs, you may be charged a commission, typically between $5 – $10. You may also need to pay a bid-ask spread, approximately 5 – 10% of your total transaction value. 

Additionally, you could have a management fee if investing in mutual funds which will vary depending on the fund provider’s fee schedule but is usually around 1% of your investment. For physical metal investing, such as gold bullion or silver coins, the costs can be higher and include storage fees and insurance. Both range between 0.5% – 1% of the total investment. 

Are precious metals worth investing in?

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Yes, precious metals commodities are a way to add diversity to your portfolio. Commodities act quite differently from other asset classes, like stocks, currencies, or crypto. Investing in some of each type of asset means you can succeed in different economic environments.

However, to invest successfully you have to spend time building an understanding of what moves metals markets. You need to set expectations and to embrace uncertainty. Gold is generally seen as a stable asset, but it’s quite expensive to invest in, while industrial metals can be affected by technological advancements or supply chain issues.

It’s a good idea to sign up for a commodities platform that has a demo account. That way you can practice and gain experience using virtual money before diving into the real thing. All of our recommended brokers above offer demo accounts, so that’s a good place to start.

Bottom line

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Precious metal investments offer an excellent range of benefits to investors. When you purchase precious metals you can diversify your portfolio, hedge against inflation, and capitalise on price appreciation. One of the key features of investing in precious metals is the various ways you can get involved. 

There is a trading vehicle for everyone, from metal commodity stocks and ETFs for long term speculators to spot metal markets, futures, and CFDs for short term traders. A trusted and regulated trading platform is a must if you want to navigate the precious metals industry successfully. 

FAQs

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Sources & references
Risk disclaimer
James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.
Prash Raval
Financial Writer
Prash is a financial writer for Invezz covering FX, the stock market and investing. For over a decade he has traded spot FX full time while... read more.