People are losing their trust in money, and the number of those who want to invest in precious metals increases every year.
Read on to learn everything you need to know before investing in precious metals.
Precious metals are popular assets for investment. However, the precious metals market is subject to changes due to volatility in the global economy and the foreign exchange market.
Let's consider the best and most profitable investment options.
Deposits: Mexico, Australia, Colombia, Peru, Dominican Republic, USA, Indonesia, Uzbekistan, South Africa, China
Application: in electronics, jewelry and automotive industry, medicine, manufacturing of chemical equipment and coins
Consumption per year: the use of gold depends by 80% on the demand of jewelry manufacturers, by 12% on industrial manufacturing, and by 6% on investment in physical gold bars
The value of gold can be easily proven: just have a look at the price changes for this metal which are fixed twice a day.
In the 1980s, one ounce was worth $850. In 1993, during the collapse of the market, the price fell to $326 per ounce. 1998 was called "a black year" for the precious metals market: in those difficult times an ounce of gold cost $278.
Before the onset of the new millennium, national banks decided on the role of gold and its prices began to rise. In 2006, one ounce rose up to $600. In just a year, cost per ounce went up again, reaching $800 this time.
In 2008, financial analysts recorded a sharp jump to $969 per ounce, and one year later, gold prices finally exceeded the $1000-mark, having increased by 13%.
In 2009, hundreds of private investors started buying gold, provoking the growth of the prices of precious metals. Next year, another rally in gold prices occurred: they increased by 28%.
After a decline of 2014 caused by the economic crisis, gold rose to $1,243 per ounce by June 2016 due to the dollar’s weakening and the strengthening of the euro.
The diagram below is a direct confirmation of gold prices increase. Gold’s value is ever-growing, which makes it an extremely profitable investment.
Deposits: Ural, Alaska, Australia, Colombia, Canada, Africa
Application: in electronics, jewelry and automotive industries, manufacturing of chemical equipment and coins
Consumption per year: the use of palladium depends by 70% on the demand of automobile catalyst manufacturers
Palladium is a noble and rare metal. In 2000, there was a 67% increase in prices for palladium: from $484 to $811 per ounce.
In 2001, palladium prices began to decline; in 4 years, an ounce was worth $258 only. After the crisis of 2008, the price of an ounce of palladium was fixed at $600 per ounce as a result of the global economic development and the pщpulation's demand for this metal.
In the period from 2011 to 2013, the price chart jumped mainly due to the situation in South Africa and the stagnation of metal mining in Russia. The peak year for palladium was 2014: at that time a record price was fixed, $896 per ounce.
At the moment, the cost of an ounce of palladium is $875.
The cost of palladium depends on the volume of its industrial consumption. Few will risk investing in palladium nowadays: financial analysts do not expect any substantial growth and instant profit for investors from it.
Deposits: Russia, Peru, Bolivia, Mexico, China, Australia, India
Application: in nuclear industry, rocket engineering, electronics, medicine, jewelry industry, photography and manufacturing of coins
Consumption per year: the use of silver depends by 54% on the demand of medical equipment manufacturers
The graph clearly shows the first rise in silver prices in 2010 which experts explain by speculative factors.
In 2011, the COMEX exchange noted a record figure for silver over the past 30 years: $41 per ounce. According to the Silver Institute, the demand for this metal fell by 4%, and consumption in Europe and North America fell by 0.5% in 2014. In 2015, silver prices fell to $15 per ounce.
Currently, the average price for a silver ounce is $16. Expert forecasts claim that the demand for this precious metal might reach 680 million ounces by 2018.
The silver market is rather specific and depends on private investors. Natural silver reserves are being depleted and theoretically might be totally exhausted in 21 years. There are only 570 thousand ounces left planned to be extracted around the world.
Statistically, the investment market of silver is 16 times smaller than that of gold.
Deposits: Russia, Columbia, Canada, USA, Alaska, Australia
Application: in automotive manufacturing, jewelry and chemical industries, oil and gas spheres
Consumption per year: the use of platinum depends by 62% on auto manufacturers
In 2008, platinum prices were higher than gold prices for a short period of time. The situation changed very sharply at the end of the year, when there was a collapse from $2,000 per ounce to $900.
Platinum began its rapid growth after the financial crisis, reaching the peak in 2011: a record mark of $1,185 per ounce.
The most difficult year was 2015 when platinum fell in price by 30%, from $1,240 to $873 per ounce. The situation on the financial market stabilized in 2016: the cost of platinum ounce averaged at $1,000.
The World Bank expects a rise in prices for platinum in 2025. Analysts of the bank forecast one ounce of platinum to advance up to $1,500 per ounce.
In 40 years, the price of platinum have lagged behind gold four times. The future of this metal is questionable mostly due to the unstable situation in South Africa where the largest platinum deposit is located: the Bushveld complex.
The widest application: silver and gold
The highest prices: platinum and gold
The most insignificant drops and the smallest investment risks: gold
The longest price-growing period: gold
Being one of the most stable and profitable assets for investment and capital increase, gold takes the lead:
1. The value of gold is time-tested
2. There is a constant demand for gold from buyers
3. Gold prices soar in terms of unstable political situation in the world
Gold is an eternal metal whose value always retains.
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