Thinking Beyond Gold: The Case for Owning Silver, Platinum, and Palladium

Gold earns most of the headlines, and for good reason: It’s definitely the 800-pound gorilla of the precious metals investment market. 

There’s no denying gold’s liquidity and physical beauty. But if you believe in the long-term investment case for gold, you should also consider the case for the other major precious metals as well: specifically, silver, platinum, and palladium. 

While they are generally closely correlated to one another, each one has a distinct industrial profile, a different supply and demand story, and its own investment logic.

I’m not suggesting you sell off your gold holdings completely and invest the whole kitco and kaboodle in alt metals. But you might consider diversifying your precious metal holdings among multiple metals. You might also be on the lookout for tactical opportunities within the asset class, as prices warrant.

Here’s what you should know: 

Silver isn’t just a recognized store of value like gold. It also happens to be one of the most electrically conductive materials on earth. This makes it an indispensable component in electrical devices and circuits. It’s a critical component in solar panels, electric vehicles, and electronics of all types.

Solar photovoltaic technology accounts for nearly 30 percent of industrial demand for silver. That’s up nearly 200% over the last decade.

Manufacturers are constantly on the lookout to buy silver for their own operations, which means there’s an effective floor on global demand. 

Data centers and AI infrastructure are also fueling the growing global demand for silver, as well. 

Supply hasn’t kept pace. The silver market recorded a deficit of 148.9 million ounces in 2024, marking the fifth consecutive year of supply shortages. The cumulative deficit from 2021 through 2025 approaches 820 million ounces — roughly equal to a full year of average global mine production.

Silver prices are more volatile than gold. Because it’s tied so closely to manufacturing, it has a cyclical component to it, though I regard the data center demand as more structural than cyclical. But silver can be more sensitive to economic cycles compared to gold.

But if you’re looking for some inflation protection as well as exposure to the rapid growth of AI and data center demand, silver may be a good choice. 

Platinum looks like a deal relative to gold.

Currently, platinum is trading near $2100 per ounce – just a fraction of the gold spot price.

But platinum is an even rarer metal than gold! For every 17 to 18 ounces of gold mined globally, the world produces just one ounce of platinum. And it takes upwards of ten years to bring a new platinum mine online. 

South Africa alone accounts for nearly 80 percent of global mined output, and mine supply is projected to decline 6 percent in 2025. Meanwhile, South Africa is subject to some serious internal political risk. A serious crisis in South Africa could cause a disruption in platinum supply – potentially spiking prices. 

Meanwhile, industrial demand for the metal is strong: Automotive catalytic converters consume about 40 percent of annual platinum supply. Industrial uses — glass manufacturing, chemical processing, and hydrogen fuel cell production — account for another 40 percent. 

The platinum market is forecast to run annual deficits averaging 727,000 ounces per year through 2029, representing about 9 percent of average annual demand.

Palladium is the most volatile of the four major investment metals.

Roughly 80 percent of palladium demand comes from catalytic converters in gas-powered vehicles. So if you’re long the internal combustion engine, palladium could be a good choice for you. However, if electric vehicles largely replace gas vehicles, we may see some reduction in global platinum demand. 

Russia controls roughly 40 percent of global palladium mine output. Supply disruptions from geopolitical tensions have repeatedly moved prices sharply, contributing to the metal’s volatility.  As a result, some experts expect the palladium market to move toward balance in 2025 before potentially tipping into surplus in 2026.

Palladium suits investors with a shorter time horizon and higher risk tolerance. Treat it as a tactical position, not a core holding.

While there are several quality ETFs that provide exposure to each of these metals, there’s no substitute for physical ownership of the actual metals themselves. 

 Why? Because physical metal carries no counterparty risk: It can’t be diluted, defaulted on, or have its accounts frozen by regulators. It can’t be easily confiscated by governments. 

If the gold spot price is a little too rich for you, silver coins and bars can be a terrific way to get started in precious metals investing. It’s affordable in small quantities, there’s a great liquid market for it, it’s easy to store at home or in a private vault, and it’s available through a wide range of established dealers.

American Silver Eagles are among the most recognized and liquid coins available. Furthermore, silver is much more durable and scratch-proof compared to 24-karat gold coins. This is an important consideration for stackers, or anyone who wants to keep the metal in their physical possession.

Platinum and palladium bars and coins are also widely available, though the markets are thinner. You may have to pay more in premiums to dealers compared to gold and silver products. These higher premiums will eventually cut into your investment returns.

All four of these metals—and only these four metals—are eligible for ownership within IRAs in the United States. However, not every gold, silver, platinum or palladium bullion product is eligible. To own these metals in an IRA, your coins, bars, or rounds must meet IRS requirements for purity and manufacture.

We’ll get to those requirements in a future installment of Wealth Money Catalyst!

—

John E.
Wealth Money Catalyst

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