Great Advice About Investing in Precious Metals

Great Advice About Investing in Precious Metals 5.00/5 (100.00%) 5 votes

A recent article in MoneyFT.com gives excellent advice about investing in precious metals. Unlike many articles that have made the rounds on financial sites in recent years, this one is devoid of ideology and very sober in its assessment of the potential for investing in precious metals in 2013. Any investment is complex and this article takes that on without flinching.

Will Precious Metals Go Up?

There is some variability of opinion as to whether investing in precious metals is something that’s likely to reap huge profits in 2013. The article on MoneyFT gives a very levelheaded assessment of the potential.

Right now, precious metals are priced very high relative to their historic prices. Gold is hovering in the mid $1,000 per ounce range, which is an excellent price for this metal. The price of the metal is largely because there is still a lack of confidence in the markets.

What investors are worried about is the national debt the US is currently carrying and the value of the US dollar. If the dollar gets stronger, it could mean that gold prices go down a bit, as demand for the metal as a hedge against inflation lessens. As the article points out, however, investing in precious metals doesn’t just mean investing in gold. There are other metals and their use as inflationary hedges isn’t the only reason that people invest in them.

Other Metals

Platinum is mentioned in the article, as its production has fallen in recent years. Platinum is already a very scarce metal and that means that the supply could become limited enough to drive prices up quite a bit. Unlike gold, platinum is heavily used in industry. The economy around the world is improving right now, and that means that industrial production is likely to go up this year. With more industrial production, there will be more demand for platinum, and that means that it could be a big winner this year.

Silver is also a promising metal. Because it trades for around $30 per ounce, it doesn’t get the kind of press that gold does. Silver, however, has seen some marked increases in value over recent years and the current prices are historically very high for this metal. Silver is also used in industry—very heavily—and that means an improving economy could mean that demand—and prices—for this metal could increase.

Investing in precious metals intelligently means that you have to pay attention to what’s going on with the economy. You also need to realize that things aren’t always as they appear. For instance, for years, people have been predicting that the economy was going to crash in a spectacular way and that would mean that gold would be used as actual currency because of hyperinflation. That hasn’t happened and, most likely, it won’t happen. Gold, nonetheless, has performed very well, as have other precious metals. They are still highly valued among investors and, even when times are improving, there is opportunity to make money in the precious metals markets.