Should You React to Headlines When Making Decisions about Your Precious Metals?
Looking at the headlines, you may feel like our lives are only going to get worse because of the market breakdown and a potential financial crisis caused by the coronavirus outbreak.
Though headlines may be right at times, the trends tell us a different story. Let’s have a look at the chart below. We can see that ever since the year 1820, there has been a decline in the percentage of people living in extreme poverty.
According to another article published by the World Bank in 2018, it still may be possible to end poverty by 2030. While this may raise concerns and a lot of people may disagree, but this is what the trend tells us.
The Declining Value of the U.S. Dollar
According to a new report published on CNBC, the value of U.S. dollar has declined to an all-time low of ever since the year2016. Though, it edged a bit in the third week of March, it is back on a low track, despite the continuous efforts of the U.S. government and central banks that have costed them about trillions of dollars.
United States entered the year 2020 with a shaky economy and the outbreak of COVID-19 pandemic made it worse. The fiat currencies across the globe are crashing down, but there’s one market that’s still thriving: the precious metals market.
The Rise of the Precious Metals
The headlines may not tell you this, but the trends will. The price of gold rose to a whopping $1,726.50 per ounce, as of April 24, 2020. Just a month ago, it was $1604.45, which shows that its growth isn’t ceasing any time soon. There are a number of factor causing this price surge.
First, the prices of gold fiat currencies are no more reliable for investors, so they are shifting their investments to a lesser-volatile asset that doesn’t get affected by the decline in currency. For the second factor, we’ll have to look at the trends.
These lines tell us how gold has always performed extremely well after an initial decline during the major economic crises.
This trend was also observed in 2008, when panic-stricken investors flocked toward gold during the Global Financial Crisis. The recent COVID-19 pandemic has also caused economies around the globe to tumble.
And as the headline would tell you, it’s a bad time for investment. But after looking at the trends, it’s clear that it’s, in fact, the best time to invest in gold.
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