What is the precious metals outlook right now? Should you invest in precious metals? If so, why? What are the “precious” metals, anyway? If you’re looking for answers to these questions, here’s a little information that might help.
The four precious metals are gold, silver, platinum and palladium. They’re valued above all other metals for their scarcity, their beauty and their practical uses. They’re found scattered in pockets around the world, and collectively they’ve been mined for thousands of years.
Deciding whether to invest in precious metals has a lot to do with your other investments and the state of the economy. Precious metals can make an ideal safeguard against recession or inflation, each of which is always possible. Most investments can lose some, most or all of their value when the economy and stock market tank or inflation wipes out the value of the dollar. But precious metals always retain some relative value, making them a good hedge against economic trouble.
Gold and Silver: Titans on the Decline in the Precious Metals Outlook
Gold is the most revered of the precious metals. It was first used by humans at least 7,000 years ago and has long been a part of currency, jewelry and dentistry. It’s also used in electronics, industry and even food.
The precious metals outlook for gold is mixed. The average price of an ounce of gold in 2012 was $1,679, according to Citigroup, which forecasts that number will drop slightly in 2013 to $1,675, the first decline in gold prices in 12 years, and then again to $1,655 in 2014.
Silver was long considered the second most valuable of the precious metals, though now it’s the least valuable by weight. It has been mined since early biblical times, and it’s used in everything from tableware and currency to medicine and clothing. The short-term outlook for silver is somewhat grim. That metal averaged $31.30 an ounce in 2012, according to Citigroup, and is forecast to drop to $31 in 2013 and $26.50 in 2014.
Platinum and Palladium: Upstarts on the Rise
Platinum, highly valued for its rarity, has been part of human culture for at least 2,300 years, though it has been traded as an investment vehicle for a much shorter time than gold or silver. Its applications include uses in chemistry, electrodes, medical equipment, jewelry and decoration.
Platinum is the second-most valuable of the precious metals, selling for $1,556 an ounce on average in 2012, according to Citigroup, which predicts prices will rise to $1,675 in 2013 and $1,775 in 2014.
The other precious metal, palladium, is the newest member of the group, discovered in 1803. Most of it is used in the manufacture of catalytic converters, the auto parts that turn pollutants into clean air. The outlook for palladium, like that for platinum, is bright: Citigroup predicts it will soar from 2012’s average of $638 an ounce to $744 an ounce in 2013 and $925 an ounce in 2014.
Overall, the is volatile. Gold and silver are expected to drop while platinum and palladium are expected to explode. This reflects the recent volatility of the precious metals market, which has risen and fallen with a roiling economy.