Home 2020 Precious Metals Investing, Gold or Silver, Which 1 or Both

Precious Metals Investing, Gold or Silver, Which 1 or Both


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The Advantage of Investing in Both Gold and Silver

Investing in both gold and silver may well provide the best of both worlds. As the investor can benefit from the price stability and long-term growth of gold, while still being able to benefit from silver’s ability to outpace gold’s short-term price growth, as well as bringing diversification to one’s investment portfolio.

Maximizing the diversification of the portfolio can help reduce the risk profile of its investments.

One would not just invest in just 1 stock, 1 bond, or 1 ETF or mutual fund.

The Big Q: So, why invest only in 1 precious metal?

Both gold and silver can help protect portfolio assets against inflation, currency depreciation, and financial chaos. Their performance during financial crises is well-known, as the Y 2008 crisis and its aftermath demonstrated.

Many investors learned from their experiences during the financial crisis, and vowed not to subject themselves to those massive losses again, and are protecting themselves with gold and silver now. And with more options to invest in gold and silver than ever, there is no excuse for investors not to protect their assets with precious metals and do not ignore platinum and palladium.

A Key investment vehicle that more and more investors are turning to is a gold IRA. With a gold IRA, investors can benefit from the same tax advantages as a conventional IRA, but invest in physical gold coins and bars. They can even roll over assets from existing 401(k), IRA, TSP, or similar retirement accounts into a gold IRA, normally without tax consequences.

For those who want to invest in silver, a silver IRA offers the same characteristics as a gold IRA, but it for investing in silver. And for those who want to invest in both gold and silver, a precious metals IRA that holds both gold and silver may be the answer.

If you are looking to protect portfolio assets with precious metals, it is time to start looking into a gold or silver IRA.

Time is of the essence, as relying on existing retirement assets one will want to do the rollover before a Bear stock market, and before gold and silver turns into a raging Bull.

So, now is the time to start taking concrete action to protect assets and ensure that you ride out a recession when it come, with the fewest financial losses possible.

Being prepared brings peace of mind, prudence is Key.

Most gold analysts recognize that the new supply from gold producers is set to decline. The concerning thing about the coming gold supply deficit is that it doesn’t require an outside force to make it happen. It’s locked in. Further, producers can’t easily or quickly increase mine output even if gold prices jump.

Here’s a quick sense of how big the problem is. Industry group MinEx Consulting reported the following sober statistics.

⦁ In 2012 the gold industry spent $11.8 billion on exploration. In 2019 only $4.4 billion was spent. Obviously if you spend less looking for gold, you’ll find less gold.

⦁ In the year 2000 there were 42 major gold discoveries (one million ounce deposits or bigger). In 2019 there were only three gold discoveries.

⦁ In 1985 the average grade of gold mined around the world was 5.17 grams per ton of ore. In 2017 it was just 1.64 grams/tonne. This implies that the “easy” gold has already been found.

⦁ The average cost to discover a new gold deposit 30 years ago was $53 million—now it’s $149 million, almost twice the rise in inflation.

⦁ An estimated $30.9 billion in value was created from gold exploration between 2009 and 2018—but the industry spent $67.5 billion to find that value!

As MinEx concludes, the industry is struggling to replace the ounces mined. This has had profound implications on the future price of gold.

So, if demand rises as  it is doing today because people are considering precious metals as a supplemental or alternative investment in their portfolios, and new supply is falling, the gold price especially will respond to this basic supply/demand equation and Traders at the world’s largest futures market are buying more gold contracts than ever before, a staunchly bullish indicator. Obviously, when you buy more than you sell and the supply continues to fall, the price will be driven higher.

‘Silver unlike gold which is treated more for investment, with the expansion of the middle class in the emerging market economies of the East, the Devil’s metal has more commercial usage requirements caused in part for the demand for electronics, medical products, appliances and other goods containing silver. Thus, like gold, silver is set to explode but not a great as gold in the coming years and follow the rising values also predicted for gold.

In my opinion, there’s no indication heightened activity at the COMEX will stop, and if so. the gold price along with silver, but at a lesser rate of increase, will continue to rise. The pandemic which has caused mine closures plus the  falling US Dollar to promote exports will only add to the investment attractiveness of these precious metals. 

Where will the price of gold rise to say $3,000 from today’s price of  1,899.10 per once for gold in 2021-2022 and the price of silver (per ounce) equal to 23.780 USD at Oct 2, 2020. Based on industry forecasts, a long-term increase is expected, the “SI” commodity price prognosis for Sep 26, 2025 is 28.407 USD per ounce,” says precious metals investor Bruce WD Barren, Chairman of The EMCO/ Hanover Group.

We follow gold and silver here and are up to the moment on the technicals. Tune in.

Have a healthy day, Keep the Faith!

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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.