Precious Metals and the Current Market

Selecting the right investment strategy can be complicated, but there are items that can be a powerful asset in any portfolio or investment plan. Precious metals can help diversify such portfolio, but it is also important to understand the way that the economy and stock market may impact the prices of gold, silver and other precious metals.

Economic Factors and Precious Metal Prices

There are several factors that may impact the prices of precious metals, but are not limited to any single market. Generally, the demand for gold, silver and other metals will increase when the economy shows signs of falling or begins to fall. For example, the debt market in China has caused the country’s stocks to fall, which in turn caused the price of gold to rise. The demand for precious metals will often correlate with the rise and fall of the stock market and the news that impacts the markets of other countries. When the value of money decreases, there is also a positive shift in the price of precious metals. Generally, it is an inverse correlation that can help stabilize personal investments.

Investing in The Right Precious Metals

Selecting the right precious metals can be an essential part of seeing the most positive results in your investment. Due to the increased use of white metals in industrial production around the world, metals like silver and platinum are a safe investment. The reason is that there is a high demand for the metals, but the amount of metal that is available is limited.

Even though white metals have a higher-than-average demand, there are some changes that suggest that gold is also an important part of an investment plan. Precious metals are used in the creation of several products, including technological advances. As the demand for the metals increase and the economy shows signs of slowing, it may be the right time to consider investing in metals.

Positive Expectations For Gold and Silver

In the short-term, there are some expectations that the prices on gold and silver will drop. Part of the drop is related to the reduced demand for electronic products; however, it is likely that the demand for silver and gold will increase in the next year. Billionaire Frank Giustra has shown confidence in the gold and silver markets and has invested a large amount of money in the precious metals due to his expectations of positive changes over the next year.

In countries like India, there is a greater interest in investing in silver due to the reasonable prices. That demand for silver is likely to increase the price of the precious metals. Furthermore, the demand for gold is expected to rise as investors try to reduce their risks in a market that is showing volatility.

The stock market is volatile, which will have an impact on the price of precious metals. When combined with the high demand for precious metals in the technology sector, it is likely that the prices will show a positive trend.

Source: BullionVault