The differences between gold and other precious metals

When investing in precious metals, gold is often chosen. This is a good choice, but it is also important not to lose sight of any investment options in other precious metals. This article compares the qualities of gold with other precious metals.
 

Gold versus silver

Silver is also known as ‘Poor man's gold’. This designation refers to the fact that silver is cheaper than gold and is also often used to protect one's portfolio.
However, a key difference between these two precious metals is that the demand for silver depends more on demand from industries than is the case with gold. For instance, gold is used as a raw material in products such as satellites, medical devices and electronic components of phones, for example. However, silver is used in many more products such as solar panels, batteries and many electronic devices. Because the demand for silver is highly dependent on activity in these industries, it also influences the silver price. 
 
As silver is an important raw material for industries, sales in the Netherlands are taxed with 21% VAT. This high tax makes the purchase of silver bars less interesting for individuals. However, silver coins fall under the ‘margeregeling’ scheme, which means that VAT only needs to be paid on the seller's profit margin. Investing in silver coins is therefore cheaper and a good option if you want to protect your assets.
 

Gold versus platinum

Platinum is used to make jewellery but is mainly used in the automotive industry. Platinum is a heavier and stronger precious metal than gold and also rarer than gold. This is partly because it is harder to mine. Since 2011, the price of gold has been higher than the price of platinum. In the decade before that, the platinum price was almost always higher than the gold price. 
 
Although investing in platinum is less common than gold, it can be an interesting option. However, the disadvantage of platinum is that it is considered a commodity and its purchase is subject to 21% VAT. It is not possible for individuals to reclaim this VAT. This makes buying platinum ingots less interesting. However, platinum coins are not taxed with 21% and are therefore an interesting option if you want to invest in platinum. 
 
Disclaimer: The Silver Mountain does not provide investment advice and therefore this article should not be considered as such. Past results do not guarantee future results.