Canada’s precious metals industry is an integral component of its economy and provides well-paying jobs and great investment opportunities; particularly in rural and northern communities.
Gold, silver, platinum and palladium production is achieved via mining operations as well as recycling scrap and obsolete material – but you may be asking yourself, what does that mean for investors like you?
Gold is one of the most sought-after precious metals in Canada, used as currency, jewelry and investment vehicles. What a lot of people don’t know is that gold can help diversify portfolios against inflation while protecting against its effects.
Canadian gold mining companies play an essential part in the global gold industry. They mine, process and refine ore with high concentrations of gold for further use in concentrate or bullion products. Some may process their ore on-site while others have facilities abroad dedicated to turning precious metals into concentrate or bullion bars.
Canada is one of the world’s major producers of gold, accounting for approximately 7% of annual production in 2021. Canada’s mining industry is driven largely by exploration activities aimed at finding new deposits or expanding existing ones.
Reasons behind why the Canadian government promotes mining are numerous; among them are encouraging companies to open new mines. Several world-class research centers exist which support both mining and its overall economy. Investing in gold can be done through various channels, such as physical bars, shares of mining companies or ETFs.
Gold prices have seen steady decline over the last decade across the country; however, they appear to be beginning to rebound and so it is expected that its market will expand as a result.
When investing in gold it is crucial that investors understand its inherent risk and volatility before proceeding with their plans. There are various varieties of gold bars available from Durham Precious Metals as well as on the market today. These range from 1/10 ounce (oz.) to one kilogram (kg). You can purchase these at banks or retail outlets near you.
Gold futures and options provide another means of investing, giving you a bet on its price at any given moment in time. While these investments tend to be more volatile than others, they could offer investors who seek higher return potential greater upside potential.
Another viable option is purchasing gold certificates that can be resold at prices matching those found in the gold market. These government-backed certificates can be found both locally and through retailers.
Silver is one of the two most abundant precious metals found in nature and used in numerous industrial products in Canada as well as jewelry and coins. Silver has long been considered the go-to investment metal in the precious metals market, yet silver is rapidly gaining ground as an attractive and more reliable return for investors.
Silver prices fluctuate due to supply and demand factors as well as inflation fears, geopolitical risk assessments and asset allocation considerations – which all can have an effect on its price. Canada’s silver mining industry provides numerous companies with significant revenue. Mining companies source silver-rich ores to produce both concentrate and bullion for sale.
Silver has long been used as a medium in coinage and nice things for rich peoples’ houses, as well as industrial applications like circuitry (www.mining.com/silver-through-the-ages-the-uses-of-silver-over-time/). Thanks to its electrical properties, silver plays an integral part in photovoltaic cells, electric vehicles and super capacitors – three technologies where its properties come into play.
Silver has also long been used as part of monetary reserves and remains one of the world’s most prized precious metals in terms of global production. This can be attributed to its historic use as a store of value – also referred to as the “silver dollar” in the US market.
However, today’s silver production largely stems from industrial processes and as a by-product of gold extraction. For instance, in Canada the majority of silver is extracted from tetrahedrite and argentite (silver sulfide; Ag2S) ores associated with other base metal ores such as lead and copper.
Nanotechnology allows silver particles smaller than one millimeter to be reduced for use as antimicrobial products such as cosmetics or fabrics. Silver has long been used in photography; approximately 30% of global silver production goes toward this industry. Recently, digital cameras have begun replacing cameras which use film.
Gold and silver reserves in the world are increasingly being owned by central banks, reflecting increased economic growth that stimulates greater demand for industrial products containing silver. Although gold and silver have traditionally been used primarily for industrial uses, other markets could become significant consumers for these precious metals in the near future.
Platinum is one of the rarest and most valuable metals, used extensively in jewelry making, watchmaking, electrical contacts and catalytic converters – as well as anticancer drugs.
Platinum production centers on South Africa and Russia.
Mined material accounts for 70-85% of new supply while recycled material comprises the rest. Platinum may be rare, yet large quantities are still necessary to satisfy consumer and industrial demand, which leads to its prices fluctuating with market conditions.
Platinum’s primary use is in jewelry, where it is hypoallergenic and won’t tarnish over time. Platinum can also be found in dental crowns, surgical tools, laboratory equipment and catalyst applications. Catalytic converters play a pivotal role in transforming car exhaust into less harmful emissions, accounting for about 30 percent of platinum mined annually.
Platinum finds a home in both the chemical and jewelry industries, where it serves as an invaluable catalyst in producing nitric acid, benzene and silicone production. Electrodes and crucibles utilizing platinum heat materials at higher temperatures.
Platinum has long been used in medical devices such as pacemakers and stents because it is nonreactive and biocompatible. Etoposide also exhibits anti-neoplastic properties, meaning that it does not cause tumor growth. Since 1971, platinum-containing drug Etoposide has been approved for treating cancer.
Because of its variety of uses, platinum is an invaluable asset that investors should hold in their portfolio. While rarer than gold and silver, investors can purchase it either physically as coins or bars or via an exchange-traded fund (ETF).
Palladium, an elegant white metal found only in limited deposits across the world, belongs to the platinum group metals (together with ruthenium, rhodium and osmium) and can be found as an auto exhaust catalytic converter catalyst that turns toxic pollutants into less dangerous components like carbon dioxide and water vapor.
Demand for palladium has been the primary force driving its price rise over recent years as catalytic converters become more valuable. As with most precious metals, palladium’s price is determined by supply and demand.
Unfortunately, given that palladium is produced as a secondary by-product of platinum and nickel extraction operations, its supply may be restricted, making production faster in response to rising prices more challenging for mines to manage. Labor issues at mines where palladium is extracted also have an impact on its price, as can workers’ strikes that reduce production quotas and drive up prices.
Palladium’s most prominent industrial use is in the manufacturing of catalytic converters for automobile exhaust. Palladium’s ability to speed up chemical reactions in these devices provides manufacturers with an edge in meeting stringent emission regulations.
Palladium can also be used in photo printing techniques like platinotyping – the printing of images using platinum and palladium salts onto photo paper to preserve photographs without their colors fading over time. This ensures longer-lasting photographs.