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Whether you’re new to investing or not, precious metals are always worth buying as they perform well during good times and very well when the outlook is rocky. The good news doesn’t stop there, though; here’s four more – very good – reasons to invest in precious metals.
1. They’re very stable.
Last year saw everyone going wild over the cryptocurrency Bitcoin, which reached an amazing high of $19,000 back in December. Then came the inevitable crash, followed by some serious see-sawing with lots of people giving up on it and returning to better-known commodities. Now Bitcoin is hovering around the $7,000 mark and the season for big killings on this crypto are probably over.
While BTC was going through the roof and then through the floor, anyone who’d been sensible enough to buy gold and silver had a smoother ride last year. There was a slight rise in both metals at the end of last year, probably when Bitcoin crashed, but this very stability, with nigh-on guaranteed (albeit often smaller) rises is what attracts people.
2. The markets are looking good but a lot of it is debt.
The Dow Jones rose rapidly last year and investors loved it. This index broke 1,000-pt barriers an unprecedented four times in 2017 and while this inspired confidence, it’s all a bit hollow.
2018 sees the stock market with a lot of margin debt – the most it’s had since 2000. Gold, silver and other precious metals don’t have much margin debt at all and its futures values look a bit rosier.
3. Precious metals have more and more industrial uses.
More industries are using more precious metals, especially silver and platinum. Metals can be found in solar panels, electronics and even anti-cancer drugs. Silver in particular is in high demand – more than half of the world’s silver supply goes into industry, compared to just a tenth going into investments. This could, in the next few years, restrict the market supply of silver, making any investments you make now worth more.
4. About those restricted supplies…
It’s not just because of the increasing number of industrial applications that precious metals, silver in particular, are at a premium. New supplies coming onto the market from mining operations are slowing down. Mining companies are spending less on research and prospecting so it looks like demand might start to outstrip supply in the not-so-distant future. Furthermore, scrap metals – again, silver in particular – are falling in supply. For many years these secondary sources of precious metals have helped to keep supplies at a steady rate, so if they star to peter out, metals prices will rise.
If we get into a situation where demand outstrips supply, then, as anyone with a basic understanding of economics can tell you, prices will be driven up. If you’re thinking about getting into precious metals, then it’s a good idea to do it sooner rather than later so that you’re getting in at the bottom. Then, you can sit back and watch your investments grow!