Gold and Silver Investment Basics
Welcome to Veldt Gold’s gold and silver investment basics. In this article we will also cover reasons to invest in less popular precious metals like platinum and palladium.
As opposed to traditional money and currency, which only has value because a government tells you it does, precious metals like gold, silver, platinum, and palladium largely retain their value over time and have done so for thousands of years. One of the earliest exchange of silver for goods by merchants happened as far back as 700 B.C. Gold was a common commodity in the Roman times. Economies rose and fell, but precious metals have always stood strong.
Why Invest in Gold?
Gold has a long standing history of holding its value whether in its pure form or in the form of jewelry.
In the 1930s prices dropped sharply as the relative purchasing power of gold soared.
During the global financial crisis of 2007-08 gold reached $1,000 per ounce and hit a $1,800+ a few years later. The US dollar, however, sharply declined during those years due to a large increase in the money supply, the country’s enormous budget and huge trade deficits.
No matter where you are in the world gold often stands above other investments. This is especially true when public trust and confidence in government is low.
A simple macroeconomic principle almost always applies to gold – when supply is low, the price goes up due to increased demand. Especially because it takes 7-10 years to bring a new gold mine into production.
Why Invest in Silver?
Gold and silver investment offers you a way to protect yourself from monetary volatility which stems from increases in the money supply by central banks.
You cannot just “print more silver”, nor can you manufacture it out of nothing – the rarity of silver makes it hold its value better in the long run.
Silver is cheaper than gold, which makes it a great asset for both beginner and experienced investors. The low price also allows for silver stacking.
Silver prices are more dynamic and more volatile, which can be both a positive and a negative thing in the short term. In the long term, the price of silver has been increasing steadily since 2004.
Why Invest in Platinum and Palladium?
Platinum is rare. 82,000,000 oz. of gold and 547,000,000 oz. of silver are mined each year compared to platinum’s 5,000,000 oz. It is a supply-demand classic. Palladium is just as rare with just under 7,000,000 oz. mined in 2011.
Platinum is an industrial and precious metal. Palladium follows closely though it’s “precious” value is slightly lower. The largest demand source for these metals is the automotive industry. As emerging economies such as India, China and Brazil are getting richer, people will want to buy more cars, therefore increasing demand and prices.
Whether you are just getting into gold, silver, platinum, and palladium, or looking to expand your bullion portfolio, Veldt Gold is here to cater to your needs. We believe that buying precious metals gives you access to timeless and borderless assets, and it is a great way to protect yourself and increase your purchasing power. Please contact us if you have any questions about your current and future gold and silver investment needs.