As the end of the year approaches, many investors are trying to decide what they will focus on as their big investments in 2014. Should they use their end of the year profits to double down on their current investments, or should they try something new? Anyone who is looking at precious metals, either as a returning investor or a newcomer to the market, should carefully consider the precious metals investment outlook before making their decision in how to use precious metals in their portfolio in the coming year.
How Precious Metals are Different
It can be difficult for even experts to predict the precious metals investment outlook. This is because both investment factors and supply and demand factors tend to work a little differently for precious metals than for other commodities on the market. For one thing, while most commodities see less investment during an economic downturn, precious metals, especially gold, usually see more. People see precious metals as a secure way to store their wealth, since they don’t devalue to the extent that fiat money can. Therefore, when they become concerned about their finances, they tend to invest in precious metals, which drive prices up even in the middle of plummeting prices in the rest of the marketplace.
However, this is fairly consistent and easy to predict, since it is usually the opposite of the market at large. There are other factors that are a bit more difficult to base a precious metals investment outlook on. One is that the supply is not so much controlled by what is mined each year – though that does contribute – as by government minting and reserves. This means that the market for precious metals in general is very heavily affected by the state the government is in financially, more so than other markets. This, in turn, can be affected by any number of factors, and in recent years it has become increasingly difficult to decipher exactly what the government’s financial decisions will be.
Why You Should Choose Precious Metals
With the precious metals investment outlook so difficult to predict, why would you want to invest in them? Well, the fact is that the predictions pertain more to exact figures and short-term results than the overall value of precious metals as an asset. It is actually quite easy to predict that precious metals will remain relatively stable in value over time and rise slowly. They have been doing so all over the world for hundreds, even thousands of years, after all, so it’s fairly safe to assume this trend will continue, especially as technology creates even more uses for these metals.
The precious metals investment outlook is also good because of the outlook of the global economy. America may be improving only slowly, but Asian markets are doing much better and may well start to dominate the global scene. The American dollar has already fallen in comparison to the currency of other countries, so it’d be no surprise to see it continue to do so if it becomes less dominant as an economic power.
However, precious metals are valuable the world over, and at a fairly consistent rate. Investing in gold or silver allows you to easily move your wealth across markets and financial systems without losing value or purchasing power. Even the domestic precious metals market is determined by the precious metals investment outlook worldwide, thanks to increased globalization in our trading. Precious metals work for investors who are worried about keeping their wealth secure, not just from national inflation but from international shifts in the marketplace.