The last five years have been difficult for everyone. With the double-whammy of the housing bubble bursting and the banking crisis in 2008, a lot of people lost their jobs and homes. Most of America felt like fish out of water or worms writhing on hooks. The only safe investments over the past half-decade have been precious metals. In fact, in that time, the investment outlook for precious metals never really faltered.
The reason for this is a bear market, the likes of which most young and middle-aged adults today hadn’t seen in their lifetimes before 2008, tends to favor precious metals investments. Whereas stocks falter with market confidence and corporations’ performances, the investment outlook for precious metals looks good at these times due to the fact that precious metals don’t bend and sway to the damages of inflation like currency does.
No matter what happens, gold, silver, platinum, and palladium will always carry some value due to their beauty, usefulness, and rarity. The supply of any metal on earth is limited, but precious metals have an especially low supply. This puts them at a higher economic value to begin with. If you add to that the fact that they all have incredible uses in the technology and/or automotive industries, you’ll see why the investment outlook for precious metals remains so high.
Now, though we’ve been talking about how optimistic the investment outlook for precious metals is, if you look at the past fiscal year, you’ll see a different story. Or you’ll think you see a different story, at any rate.
Gold, silver, and platinum, all lost value from the beginning of 2013 to when the market closed for the year. No matter how sumptuous the precious metals market might seem in a recession, when the economy starts to bounce back, it would seem, the investment outlook for precious metals seems to diminish.
However, you should look at two things when you consider whether or not to invest in precious metals. First of all, you need to look at what’s happening in the near future in the United States. The economic easements that were put in place – specifically artificially lowered interest rates and an inflation in the amount of currency printed per year – are scheduled to begin tapering sometime in 2014.
The market will see some backlash, as the short-term stopgaps are removed and real economic recovery begins. That means that the investment outlook for precious metals will become more optimistic again. Further, you need to remember to look at the long term. Precious metals investing is not a short-term, high-return investment. These are investments you’re making to hedge your retirement fund against inflation. A minor increase or decrease in worth over a few months or a year won’t matter if you’re patient and hang onto your precious metals investment for many years.
Manifold Demands for Precious Metals
You should also think about, when looking at the investment outlook for precious metals, that their supply is limited. That’s part of what made them precious sin the first place. That limited supply already sets them up for success in a supply and demand equation.
Then take into account the fact that they’re all used in different capacities in industry. Gold is used in the circuitry for laptops and cell phones. Silver is useful for circuit boards, too, and it’s integral to the manufacture of solar panels. Palladium and platinum are essential to the production of catalytic converters for the automotive industry.
None of these demands is going away. When you think of the investment outlook for precious metals, think of these factors and how long you’ll be investing. Then go buy yourself some precious metals and hedge your retirement against inflation and other economic crises.