In this Article:
Every year, precious metals dealer Kitco releases its outlook series for precious metals for the coming 12 months.
And every year, that includes a survey of both retail and institutional investors. Some call it the “Main Street vs. Wall Street” survey.
This year, that survey has gold as the top pick for retail investors. But it’s not in the top spot for Wall Street.
Since Wall Street is also known as “the smart money” and we’re conversely known as the “dumb money,” I figured I’d take a look and see what Wall Street’s seeing that Main Street might be missing.
That led me to create my very own list of the top metals I see generating the biggest returns for investors in 2022.
And I came to the same conclusion my former colleagues on Wall Street did. Gold’s just lost a little of its luster for me.
But there are a lot of other opportunities out there in the precious metals market.
Gold’s Old Partner
First on my list is a metal that often goes hand in hand with gold. And that’s silver.
I like silver in 2022 for several reasons. First, it’s both a precious metal and an industrial one.
There’s silver in pretty much every electrical device out there (including those used to generate renewable energy, like solar panels).
Second, it’s been locked in a dance with gold for the entire history of humanity. Gold leads and silver follows.
And historically, when gold makes a move, silver’s is amplified. So if gold moves up this year (which it likely will), silver’s probably going to make a bigger move.
And finally, there’s this thing called the gold-silver ratio. It’s a relation between the prices of the two metals. But more simply, it’s how many ounces of silver you can buy with one ounce of gold.
Before we ended the gold standard, it hovered around 25-to-1, meaning you could usually buy 25 ounces of silver with one ounce of gold.
Since the late 1960s, it’s historically peaked at around 75-to-1 (except for a point in 2020 when it soared above 100-to-1).
After hitting that level, it usually reverts as silver closes the price gap. And right now it’s sitting at 80-to-1.
So while I’m bullish on gold in this environment, there are a lot of reasons to be even more bullish about its old partner, silver.
The easiest way to invest in silver is going to be through an ETF that gives you ownership rights to physical silver stored in the fund’s vault.
That way you don’t have to shell out money on a safe — money you could be spending on more silver.
The most liquid ETF is the iShares Silver Trust (NYSE: SLV). It currently costs about $20 a share and trades just like a regular stock.
If you’re interested in going direct to the source, then a silver miner is your best bet. You can go with one of the major players, but junior miners almost always deliver more juice when prices rally.
Most of those trade on the Canadian exchanges and they’re pretty volatile. But if they hit pay dirt and prices spike, they make investors very happy.
My current favorite speculative play in that space is Silver Hammer Mining (CSE: HAMR). It also trades over the counter in the States, but the Canadian listing is a little more liquid.
Precious in My Eyes
Next up on my list is a non-golden metal you might not really consider “precious” that could one day become even more precious than gold.
It’s copper. And it is technically a precious metal, even if most of us know it as the stuff coating those useless pennies in the change jar.
But it, like silver, isn’t just a precious metal. It’s an industrial one too. And as the world goes electric, we’re going to need a heck of a lot more of it.
You’re talking an average of around 50 pounds of copper in every gas-powered car on the road. That number nearly triples, to 132 pounds in every electric vehicle.
You’re talking about literally thousands of miles of copper wire in every single vehicle (no matter the power source).
It’s also used in every solar panel ever built (and that ever will be built). Wind turbines don’t work at all without it. Neither do electrical grids, for that matter.
If its electric, copper is integral. And if the world’s going to turn everything electric, we’re going to need a
bigger boat lot more copper.
Now, like silver, you can buy an ETF that gives you ownership of the actual metal. The most liquid one I’ve found is the United States Copper Index Fund (NYSE: CPER).
Or you can invest in a copper producer. The biggest and safest is going to be Freeport McMoRan (NYSE: FCX). It’s a great operation and likely to deliver a solid gain.
But, again, if you want that explosive potential, junior miners and exploration companies are the way to go. I’ve been watching one in particular for a while.
It’s got rights to what could turn out to be a pretty big deposit right near the Tesla gigafactory in Nevada.
If it’s able to prove those reserves and start producing, it could deliver early investors a serious gain.
Like the junior silver miners, it’s a Canadian operation and trades on those exchanges. The company’s called Bam Bam Resources (CSE: BBR). It also trades over the counter here in the U.S.
And like the silver miner, it’s a very speculative play on future success.
Historically Inaccurate Pricing
And finally, my third precious metal that’s not gold is one that’s always been more highly valued than gold but has been mispriced for the past few years.
I’m talking about platinum. It’s scarcer than gold. And it’s always cost far more.
Just think about it… What’s better: platinum membership or gold membership?
What’s got the better rewards: A platinum credit card or a gold one?
And what happens after you sell a million records? You get a platinum album.
Platinum is more highly valued than gold and it’s always cost a lot more than the yellow metal.
But that’s not the case right now. And that’s a disconnect you can take advantage of…
Because platinum is an industrial metal like copper and silver too. And it’s going to play a major role in reducing pollution and fighting climate change.
You see, it’s an intrinsic part of the catalytic converters that help remove the carbon monoxide from engine exhaust.
And right now, it’s going for about $1,000, while gold costs nearly twice as much! That can’t last.
There are a few ETFs you can buy that give you exposure to platinum. The most liquid is probably going to be the Aberdeen Standard Physical Platinum Shares ETF (NYSE: PPLT).
It’s a little pricey at nearly $97 a share, but it could easily double as the prices of gold and platinum go back to their historical pattern.
You can also go with the miners here as well. The biggest with a focus on platinum is South African operation Sibanye Stillwater (NYSE: SBSW).
As for junior operations, New Age Metals (TSX-V: NAM; OTC: NMTLF) is exploring a site it hopes holds a large platinum deposit in Alaska.
And Nickel Creek Platinum Corp. (TSE: NCP; OTC: NCPCF) is developing a Yukon site that has 5.7 million ounces of platinum group metals.
Both are pre-revenue and very speculative. Both could deliver massive gains in the right environment.
To your wealth,