Which Precious Metals Give You The Most “Bang for Your Buck?”
Precious metals are an integral part of most investment portfolios. There’s only a limited supply of these precious metals on earth and they’re constantly mined for various purposes.
Each of these precious metals is used for a different purpose. Before investing, it’s important to understand the fundamentals of what makes them a good investment option so you can predict which metal is going to be the most in-demand.
Over the past 30 years, gold prices have increased by 335% and here are some reasons why it’s expected to increase in value and offer you a high return on investment.
1. Devaluation of the US Dollar
After the mortgage crisis of 2008, gold prices nearly doubled until 2012. Whenever the US economy is in trouble and the dollar’s value against other currencies falls, people turn to gold as a safe investment option. With the current US-China trade war and political uncertainty in the US, economists fear a recession. You should consider investing in gold bullion bars, coins or ETFs while the prices are still low.
2. Increasing Demand
The unique properties of gold make it useful for industries like aerospace, electronics, dentistry and glassmaking. In recent years, emerging markets across the world have been booming, increasing the demand for gold. Further growth for the various industries that use gold as a raw material is expected in the coming years.
3. Inflation and Deflation Protection
Historically, during times of inflation, gold has incorporated the increase in prices and this “crisis commodity” has performed well. Alternatively, in the last period of deflation during the 1930’s Great Depression, people wanted to store their cash safely and the best way to do that was stockpiling gold. Gold retains its value regardless of the prevailing economic conditions.
Considering the highly increasing demand and the global economic and geopolitical conditions, gold is expected to provide a good return on your investment.
Over the past 10 years, palladium’s price has increased by around 520%. That is a tremendous rate of return. Like other precious metals, palladium is used as a hedge against inflation and also has extensive industrial uses.
Auto Industry Demand
Palladium is used as a raw material in catalytic converters placed in cars and trucks, particularly in the US and China. While the number of cars sold in the US has fallen, the number of light trucks sold increased from 8.7 million units in 2014 to 12 million units in 2018. Global pressure for the installation of catalytic converters due to the current environmental crisis is also on the rise. The increase in demand will obviously translate to an increase in palladium prices.
Around 44% of the world’s palladium supply comes from Russia. And there are reports suggesting that their reserves are falling short. In South Africa—the second-largest palladium producer—labor strikes across the country have threatened the metal’s stable supply.
Palladium’s price has been steadily on the rise since 2009. While there’s no indication of a decrease in demand or increase in supply, it’s safe to assume that palladium prices will continue to rise in the coming years. You can also consider investing in stocks of precious metal companies, which would also yield a high return.
Investing in precious metals comes with the responsibility of safeguarding your assets. Orion Metal Exchange, located in Los Angeles, offers both, safe home storage and secure vault storage for gold and silver according to your needs. Contact us at 1.800.559.0088 to receive expert recommendations on how to safeguard your assets.