In the past several decades, we have seen many “fad” investments rise up and after time they disappear. These fads are like fair weather friends to the avid investor. However, in comparison to fad investments, gold and precious metals can be likened to a faithful friend who has stood by your side for years past, and who can be depended upon to have your back for years going forward.
For the past 20 years, gold has been on a mostly positive trajectory. Depending on the economy it will go up for a spell and then plateau again. Right around the time of Y2K, the economy was in a place where the dollar was strong and interest rates were high. This was bearish for the yellow metal, and gold prices dropped to under $300/ounce. Since then, we have seen a tremendous change in the US economy and the US financial policies coupled with social and political turmoil.
The economy is primed for inflation and uncertain times, and yet we aren’t seeing what we’d expect from gold and silver…yet.
One of the biggest factors impacting precious metal prices lately, has been Bitcoin. In fact, Bitcoin and gold have been running inversely to one another. During the time when investors were particularly enthusiastic about crypto currencies, we saw gold prices plateau. However, Cryptocurrencies are still rather young, and in recent days we have seen how this market can be easily manipulated after one Whale engaged in a huge pump and dump scheme. Where Bitcoin is concerned, 40% of the market is owned by 500th of a percent of total investors. The smaller market makes Bitcoin and other cryptocurrencies prime for market manipulation.
Another issue that we are seeing with Cryptocurrencies is similar to the internet bubble of the late 1990s, where thousands of dot-com companies sprung up. Today, maybe 4 of those companies are still in existence.
With so many new contenders in the field of cryptocurrency, it can be really difficult to ascertain the winners from the losers. These “New Kids on the block” may not be around in 5 or 10 years. There could very well be the “next big thing” emerging in the markets at that point.
However, even though we can’t look in a crystal ball and predict the future of crypto currency, just like we never would have predicted the disappearance of the dot-com era, we can be sure that gold and silver will still be around in 5, 10 even 100 years from now.
Since as far back as the history books go, precious metals have been a storehouse for wealth. It can be counted on to be a financial contender in the markets for years to come.
As the financial easing, deficit, inflation, and other monetary issues usher in a time of uncertainty for the dollar and other global currencies, gold and silver are the perfect safeguard for your wealth and your portfolio. The price of both gold and silver are expected to skyrocket as these bullish factors continue to play a role in the US and world economy.
The momentary lull in prices can be looked at as the perfect opportunity to put a safety hedge around your portfolio while the lower prices last. Based on the chatter regarding inflation, these prices won’t be around much longer!