The precious metals outlook may not look quite as shiny as it once did, but this is largely an illusion. It’s important to remember that, when you’re considering gold, silver, platinum or palladium as investments, these metals have been around as financial instruments much longer than one lifetime. Gold and silver, in particular, have been used by humanity for thousands of years. The precious metals outlook, in fact, is something that one should never confuse with the precious metals reports of the moment.
Gold and silver have both been considered financial instruments for centuries. This rather blunts the shock that some people may have felt when the gold prices started to decline in recent months. Over time, one can see that there have been many declines and increases in the precious metals markets. When one looks at such things historically, it does become apparent neither gold nor silver have ever been worth no money, and that means something.
The precious metals outlook always needs to be considered in light of the fact that precious metals have never lost all of their value. Many investments have lost all of their value over the history of organized stock purchasing and other type of investing. For example, a company can go what is figuratively called belly up and all of the people who own stock in it can end up losing every penny they put into that company. Given the historical record, the precious metals outlook does not realistically include the possibility that gold, silver, platinum or palladium would suddenly become worth no money at all.
One of the other things to consider about the precious metals outlook is that it is very much tied to the value of currency. Among the things that make some investors very nervous is the fact that governments are routinely manipulating the value of their own currency for their financial policies. This isn’t too surprising, but it does make some investors and economists worry that nations that do this are at risk of devaluing their currency so much that people could stand to lose a lot of their wealth if all they have saved up is cash. One of the reasons that people purchase precious metals is so that they have another form of wealth that is not tied to financial policy and that cannot be manipulated for political or economic reasons.
For many years, likely because of the spectacular increases in price over the last decade, the precious metals outlook as represented in the media has largely been synonymous with the outlook for gold. It’s important to remember that there are other options in the precious metals market. Right now, some people are gravitating toward silver. There are many different reasons why they are doing so, but one of them is the fact that silver can increase in value whether the economy is good or bad. Industry uses silver very heavily, which means that they tend to drive up the price when they start running at full steam.
No matter what happens, the precious metal outlook always has to take into account the fact that gold and silver have long been effective hedges against inflation and that will continue in the future. A realistic projection of the value of gold, according to some economists, has it going up again in value in the approaching years. Whether or not it does, it will continue to serve as one of the best ways to protect wealth against currency inflation and other potentially disastrous results of economic policy.