Precious metals investing in 2013 is shaping up to be as active as it has been in the past several years. Investors are still bullish on metals including gold, silver, platinum and palladium, and even other metals are coming into the mix, including copper. Over the past several years, quite a bit of the investment activity in precious metals has been driven by anxiety over the economy and whether the dollar would suffer from significant inflation. Precious metals investing, at present, appear to be something that investors are maintaining an interest in for entirely other reasons.
In Good Times
It’s not uncommon for people to put their money into gold when they believe that the economy is going to start doing poorly. This is because gold has a value that isn’t pegged to any particular currency, allowing investors who want to be able to move their wealth between currencies to do so without having to worry that they’re going to lose a lot of value in the transaction. Other precious metals, however, are invested in for other reasons, though investors do sometimes put their money into them for largely the same reasons as the aforementioned.
In good times, the demand for certain types of metals tends to pick up. While precious metals do allow people to protect their wealth outside of currency, other metals allow them to invest in industries when those industries are picking up. The automotive industry, for example, is a major consumer of platinum and palladium. Because the automotive industry has been picking up lately, investors have been showing an interest in acquiring these metals, figuring that the demand for that will increase and that, because of that, the price will go up.
Palladium, platinum and silver are all used in a variety of different industries. While gold does have some limited industrial usage, it is primarily a financial metal. Palladium and platinum are used in the manufacture of catalytic converters and certain types of very advanced batteries. This creates an interesting situation where, if automotive technology were not to advance that much and catalytic converters were still in great demand, palladium and platinum would likely continue to be in demand because of that. Conversely, if automobiles largely switched over to battery power, both of the metals would still be in demand, as they are used in the manufacture of some of the most advanced batteries out there.
Silver has too many uses to describe. This metal is rare enough to be called precious, but it’s also common enough to be used in some very every day applications. Silver is used in everything from electronics to silverware to medicine. The demand for silver can pick up very quickly, particularly when manufacturing picks up, and that means that investors tend to start moving into this metal when things are good.
The economy may be picking up in 2013, but that doesn’t mean that the tremendous demand and record prices for precious metals are necessarily going to change because of that.