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It’s exciting to step into the world of precious metals. Storing value for the future is an amazing feeling for anyone, but many folks get the most excitement from watching their investment grow. And thanks to green energy, precious metals might reach new heights in the coming years.
This will seem counterintuitive to some. After all, mining is hardly eco-friendly. Additionally, many of the rare earth metals used in green tech don’t fall into the precious metals category. This leaves many people wondering how gold, silver, platinum, and palladium could help the planet.
When you take a deep dive into precious metals and green energy, though, the connection is difficult to ignore. Plenty of the metals we use to complete our portfolios are commonly used in eco-friendly technologies. And if the trend continues, we could see huge gains in the future.
In 2013, an article from Yale warned that “a scarcity of rare metals is hindering green technologies.” It’s difficult to see the connection, though, if you aren’t well versed on eco-friendly measures. If you consider what’s required for these solutions, it becomes clear.
Precious metals and green energy — along with other eco-friendly technologies — simply go hand in hand. Consider a few of the following environmental advances and how these metals contributed.
Not everyone has been affected by the current global water crisis, but a time may come when that changes. There are many ways to move water from one place to another, but gold-palladium nanoparticles offer the chance to instead treat groundwater teeming with pollutants.
By offering a way to treat groundwater rather than using eco-intensive processes to relocate water, gold provides the opportunity for clean drinking water without wrecking local environments.
When you buy a new American Silver Eagle, it shines like it’s reflecting the sun. Perhaps coincidentally, silver is also a vital component for absorbing the sun’s rays and converting them into energy. A single solar cell uses about 130 mg of the precious metal.
While some green technologies may eventually function with less expensive materials, this won’t happen for a while with solar panels. Experts believe alternative or lower-cost raw materials won’t replace silver in these cells for at least a decade.
There was a point when platinum was worth more than gold. Many years have passed since that point, but that time period evidenced the fact that precious metals and green energy are linked. During those years, platinum was in high demand due to its use in vehicle catalytic converters.
Many people have heard of these auto parts, but few know what they are. They are essential components in filtering harmful gases so they’re not released in the air. As environmental regulations increased, auto manufacturers needed more of the metal to build these parts.
If you keep track of precious metals price charts, you’ll notice platinum isn’t quite what it used to be. As the metal fell back below gold, though, it seems palladium did the opposite. That’s because palladium replaced platinum in catalytic converters when the latter became too expensive.
Of course, now palladium has risen well above the price of gold. This has led to discussion in the auto industry about switching back to platinum. While this is a possible outcome — perhaps even a likely outcome — it would take time to fully implement this conversion.
Regardless of what happens, though, it seems palladium and platinum are both great metals to own.
The importance of precious metals for green energy goes beyond just single uses. For instance, eco-friendly technologies using platinum don’t just include catalytic converters. One of the most important uses — especially with the palladium shift in catalytic converters — is in hydrogen fuel cells.
When you see an electric vehicle on the road, there’s a good chance it has platinum in it. Hydrogen produces electricity when it passes through the metal. This provides the power necessary for electric vehicles to hit the open roads.
Even though many people don’t consider copper a precious metal, green technology still needs the material regardless of its label. In fact, it’s often referred to as “green gold.” It is a major component in both hybrid and electric cars, and it also is an integral component in solar panels.
The semiconductors in these panels can use copper or silicone. The former involves a more complex process, but it’s far more energy-efficient. While buying copper bullion is unlikely to ever offer the returns seen with gold, it will still play a vital role in the green energy revolution.
While green technologies need precious metals, getting them isn’t the most eco-friendly process out there. Mining is a significant contributor to greenhouse gases, and the practice can destroy the surrounding environment. Fortunately, it seems there’s a greener future even for mining.
More sustainable mining practices have been years in the making, and new regulations and technologies have significantly reduced the environmental impact of mining. There’s also been a major push for green mining techniques to gain wider acceptance in the industry.
The drive to reduce mining’s impact on the environment involves many steps. These include:
Of course, it’s unlikely that the world of mining will ever become carbon neutral. Even with this being the case, green technology and precious metals have to coexist. The former needs the latter to grow. Fortunately, the recycling world can pick up much of the slack.
Many people don’t realize it, but a significant portion of precious metals production comes from recycling. In 2009, recycled metals made up 42% of the world’s total gold production. That number dropped to 28% in 2020, but it’s still a significant amount.
As green technologies increase the demand for precious metals, it’s very likely we’ll see a simultaneous increase in recycling. This should equate to less overall mining, and the heightened demand will also mean great things for anyone investing in precious metals.
Even though foresight is a powerful tool when investing in precious metals, it’s not always necessary in order to make profit. For instance, the historic price trend of gold has always gone upwards even though there are temporary fluctuations in its value.
When it comes to predicting which precious metal will benefit most from green energy, though, foresight is the only thing that will prove helpful. There’s no guaranteed way to predict the future of green technology. It’s possible we’ll wake up one day to new tech negating the need for these metals.
Of course, that’s an unlikely outcome. A more probable scenario is that demand for certain precious metals will wax and wane over time. This is why having a diversified portfolio is so important. Diversification safeguards your portfolio even if one asset temporarily underperforms.
There are great things in store for the future of precious metals and green energy. If you’re hoping to predict which will offer the biggest returns, though, your guess is likely just as good as those from the experts.
There are many reasons to hope for a greener future, and higher bullion prices is far from the top of the list. Of course, it’s still on that list. Because what’s better than watching the world become a healthier place? Watching the world become a healthier place while your investment grows.
The fact is that rare earth and precious metals are an essential component of green technologies. The silver bullion in your shoebox could help power a solar panel, and the gold in your safety deposit box could one day remove pollutants from our groundwater.
There’s no way to tell how quickly the green revolution will grow in the coming years. As it picks up steam, however, a variety of precious metals will benefit. Don’t wait until it’s too late to invest. Visit our Precious Metals Bullion page today to secure your place in an eco-friendly world.
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