Precious Metals Can Withstand Global Economic Downturns

Unlike paper precious metals invested in ETFs and the rest of the stock market, physical bullion coins and bars are able to ride out the ups and downs of the global economy. Investments in physical gold, silver, platinum, and palladium are much more stable than anything else. As the stock market rebounds slowly from its 2008 crash, the price of precious metals have significantly increased over the last 12 years. In fact, gold and silver has been outperforming the stock market until recently.

Historically, the price of precious metals has steadily increased over time. Take gold, for instance. In the early 1970s, gold prices realized a 67% increase from US $58.42 per ounce in 1972 to US $97.59 in 1973. Just five years later, in 1978, another significant jump was recorded, this time with prices increasing by 58% from US $193.40 to US $306.00, followed by another huge jump to $615 per ounce in 1980. Through the 1980s, 1990s, and early 2000s, gold prices did not fluctuate much, staying anywhere between US $250 and US $400.

Since 2006, however, the price of gold has steadily increased as the result of the weakening dollar and economic crash. Even though the recent strengthening of the US dollar has driven gold prices down a tad, analysts are confident that the continuing economic turmoil in Europe and Asia will drive them back up again, although at a much slower rate than what just happened in the United States.

Along the same vein, the price of silver has followed the same trend as gold, increasing in the late 2000s and settling down quite a bit in recent months. The same can be said for platinum and palladium. Even with seemingly volatile behavior, the precious metals do not fluctuate in value as much as the stock market. As a result, precious metals have become popular as investors look to diversify their portfolios while waiting for economic recovery.

While gold and silver prices are on a downhill slump at the moment, the price of platinum is on the rise. The precious metal is extremely attractive to investors looking to diversify their precious metals investments beyond gold and silver. A record deficit in platinum production and supplies, coupled with an increased demand of the metal from the automobile industry, is also a huge factor in pushing up the prices.

Stabilizing at an even higher price over the last few years than platinum is palladium. Currently, palladium, a cheaper relative of platinum, is a great return on long-term investments. Palladium is a precious metal that is used in dentistry, electronics, medicine, and plays a great role in groundwater treatment and chemical applications. The price of palladium will continue to increase as demands of this rare precious metals go up.

Often times, precious metals investments serve as back-ups when the stock market is not doing as well. Many individuals tend to invest in gold, silver, platinum, and palladium when the US dollar is low in value, giving them something substantial to retire on should the economy continue to decline. Investing in precious metals will help preserve money, and can be spent through an exchange for any global currency.