Investors have long viewed precious metals as a safe haven asset. When economic conditions are poor, we tend to see the price of precious metals rise, and vice versa. Like most commodities, supply and demand also influence the value of precious metals. Here are some of the trends we have found that seem correlate with the price of gold and silver.
When inflation rates increase, the value of our dollar decreases as does many other investment avenues. This can increase the value of gold because it is used as a hedge against inflation and during volatile markets. The value of precious metals are not directly affected by the fluctuation in the value of our currency.
As economic confidence declines the rates decrease. When this happens, investors turn to precious metals to protect their wealth. This increases the appeal for gold because low interest rates means other investment opportunities are not making any additional income.
Budget decisions, foreign investments, and industry procedures all affect the value of precious metals. Change in these areas impacts the value of the dollar. Many investors will obtain gold when facing the risk of a price collapse. Economic and trade policies contribute to the overall balance of trade affecting the strength of our economy.
Gold is becoming more and more challenging to mine. Once supply is not meeting demand, the asset becomes more valuable as more people are willing to pay for it. Miners are seeing more challenging conditions, meaning it takes longer, costs more, and there are more risks in mining gold. This adds to the costs in production and overall can affect the price of the commodity.
With low risk, and volatility, precious metals are one of the best options to keep a diversified portfolio and get higher returns over time.
Precious metals are one of the most popular asset choices among successful self-directed IRA investors.
The statements made on this website are opinions and past performance is no indication of future performance or returns. Precious metals, like all investments, carry risk. Gold, silver and platinum coins and bars may appreciate, depreciate or stay the same depending on a variety of factors. Huntington Alternative Wealth cannot guarantee, and makes no representation that any metals purchased will appreciate at all or appreciate sufficiently to make customers a profit. The decision to purchase or sell precious metals, and which precious metals to purchase or sell are the customer’s decision alone, and purchases and sales should be made subject to the customer’s own research, prudence and judgment. Huntington Alternative Wealth does not provide investment, legal, retirement planning, or tax advice. Individuals should consult with their investment, legal or tax professionals for such services.