The past five years have been turbulent for the stock market, yet the precious metals market has seen sustainable overall growth and is poised to gain additional value in 2013. This is largely due to the inherent worth of the precious metals, yet those investing in gold and silver also cite the variety of industrial applications their commodities hold.
However, one of the most interesting variables in the market for gold and silver in the upcoming twelve months is likely to be the showdown in Congress over the debt ceiling, and the ensuing financial repercussions that stem from its backlash. The first quarter of the New Year has seen vitriolic fighting over the debt ceiling, and this has played out well for those owning tangible gold and silver coins and bullion.
Goldman Sachs Group Inc. recently published a report advising its clients to purchase gold and silver amidst the projected turbulence the debt ceiling debate is likely to create. Goldman analysts predict a three-month time period in which gold and silver prices will jump significantly in light of the perceived tax hikes spurred by the debt ceiling increase. Additionally, financial analysts point to the ten percent increase that gold jumped during the last debate surrounding the debt ceiling. Given these forecasts, along with a history of increased market value in the precious metals market, those who are investing in gold and silver would likely bolster their financial positions by purchasing additional quantities of the metal prior to the resolution of the debt ceiling debate.
Interest Rates and Gold
Another variable that is projected to play a part in the increasing valuation of gold and silver is the current interest rate. US News reports that the public’s worry about increasing inflation has served to continue driving interest rates lower. Yet, as US News points out, lower than average interest rates have been the number one predictor of higher gold and silver prices in the past fifty years.
Consequently, given the current lowered interest rates, experienced analysts suggest that individuals investing in gold and silver are in an increasingly favorable position as they expand the ratio of precious metals to other investment instruments in their portfolios. Thus, it is advisable for investors to try to purchase as much gold and silver from a precious metal broker as possible within the first quarter of 2013. This will allow them the potential to cash in on the forecasted increase that has been historically seen over the past fifty years.
An increased investment in gold and silver can provide a portfolio with the security it needs to remain sustainable when battered by the wild fluctuations of the stock market. Additionally, with the impending financial turmoil the debt ceiling debate in projected to produce, savvy investors will be in a great position with increased levels of tangible precious metals. Finally, provided that the interest rate ties to gold valuation hold with their fifty-year historical trend, gold and silver are positioned to enjoy large gains in the first quarter of the year.