Gold and silver have been considered valuable throughout history, and many people want them. They don’t lose their value and have proven to go up in price when the stock market is crashing.
Whether you’re an ordinary person or a king, you’ll likely feel that gold is transcending languages and borders as well as the tides of the ever-changing fiat money.
Most of the gold and silver bars are not controlled by a single financial entity, and they are all finite resources. Governments don’t exclusively own them, and this is why they will always hold an inherent value regardless of the market trends.
The government can’t print the precious metals, but they can always print money until their currencies drop in value. History has already shown that paper currencies that were printed invariably have been known to have their value debased.
This is why it’s recommended for many to have at least a portion of their portfolio invested in gold and other precious metals so they will have a safe haven when things don’t turn out well.
7 Reasons to Invest in Gold and Silver
1. Continuous Demand
The economy and investors in America and other countries will always have a demand for gold. They are needed by the government, central banks, hedge funds, private investors, and other big industries. They are valuable in making new technology, and gold is an excellent conductor of electricity.
It’s not surprising why so many people are becoming interested in these precious metals. For individuals, it would be better to read the APMEX review for more information about companies that may help them set their foot into the gold and silver investment realms.
Some may need help from seasoned experts in the industry that can connect them with reputable dealers, depositories, and brokers.
In 2015, the Central Bank purchased almost 600 tons of gold, showing that the demand for this precious metal is increasing.
Since it’s useful in various applications in medicine and electronics, it’s expected for the demand to rise even more in the coming years.
2. It’s Scarce
Mining explorations and setting up of equipment proved to be more challenging through the years. The venture is expensive, and many companies don’t make any money if an area proves to have only a small amount of gold in it.
Evacuating the equipment and workers from an unproductive mine takes time and money as well. This is why it’s estimated that many of these companies will stop mining in a few decades. This will result in a scarce supply of silver and gold around the world when this happens.
The scarcity can drive prices up as well as the demand. In 2013 alone, if one places all the available gold side by side, the result will be a pure block that will measure just 21 meters in any direction.
According to an article authored by Goldman Sachs, the world only has about 20 years of mineable reserves, which could positively impact the prices, especially when you retire.
3. About Gold to Silver Ratio
For many years, the ratio for silver to gold has been 16 to 1. For every 16 ounces of silver, this could mean that an investor could purchase a single ounce of the yellow glinting metal.
However, these figures are closer to 70 to 1 nowadays. Many experts have predicted that the ratio is going to have a bigger difference in a few years.
Some are predicting that the ratio is going to be closer to its previous average of 16 to 1 but this will also drive up the prices of silver in the future.
4. More Privacy
There’s also one unique opportunity offered by the precious metals and this is privacy. Know that this may not be present in other investment vehicles.
When you first acquire your bullion or coins, the information is not going to be shared publicly or with any private entity. You have the right to your privacy and to whoever you store or share your silver is nobody’s business.
You could do whatever you want with them and you can also sell them at any time.
5. Great Liquidity
Many owners have gotten instant liquidity with this investment. They can convert the bullion into cash in a currency of their choosing.
This may not be possible with other vehicles, but this is something that can be done with silver, gold, platinum, and palladium. You can learn more about palladium on this page here.
At any given point, know that there will always be someone willing to pay you an amount that will be nearer the spot price, and you just have to find them.
If you need cash, you can convert the assets that you have into it and you can get another currency depending on the country where you’re currently living.
6. Offer Diversification
There’s devastation and a trail of tears that were brought about by the 2008 crash. Many people haven’t been able to fully recover as the market wiped their savings and lifelong earnings.
This is where diversification can help. Putting your eggs into several baskets may help against sudden changes in the economy.
If you have at least a small portion of your portfolio in precious metals, you can offset many of your losses and get funds to purchase affordable stock prices.
This is a strategy that’s often recommended by many professionals.
7. Act as a Hedge Against Inflation
During times of inflation, know that precious metals can serve as your purchasing power. This can buy food, clothing, and other essentials and you can also take advantage of the crash. In 1933, the value of a single ounce of gold was $35.
This is when you could still buy a tie, a dress shirt, and a suit. Nowadays, the value is over $1000, and you could still purchase the same things. However, you’ll have plenty of money left to get a pair of shoes.
This is just one of the protections a purchasing power can add to your life.