Saturday, April 8, 2023

How to invest in gold and silver

If you ask professional investors what the best investment is, they will give you a host of different answers: perhaps a particular stock, a sector, or some complex combination of stocks and bonds and derivatives.

But if you ask my mother, she will always answer you the same: gold.

My mother may or may not be right, but she is part of a huge group of people obsessed with the value of shiny metals gold ira. Gold and silver are perhaps the oldest forms of value that human beings have and to this day they still have a lot of power over us.

Here you will find everything you need to know about how to invest in them.

 

What makes gold and silver valuable?

This question is fun to answer. The answer is simply: because we think they have.

Sure, gold was harder to mine in the past, and it was the perfect metal for making coins, since it doesn't corrode and it's pretty. But today, we have so much gold stored in vaults, and we know there is plenty left in the mines, that the traditional laws of supply and demand no longer work.

You could also talk about how the US dollar used to be backed by gold, which means that for every dollar, the US Treasury Department had to store a certain amount of gold, but that hasn't been the case since 1971, so which is not really relevant to us right now.

The history of silver is similar. It has some industrial applications, such as electronics, and an increase in demand can affect its price, but mostly it has value because people see it as a safe store of value.

Investors who are genuinely interested in gold (some call themselves "gold bugs") think that gold is a safer store of value than money itself. His idea is that if society collapses, gold could continue to be used as a universal currency. Need to barter for food or a boat to an island during the apocalypse? Gold will allow you to get it.

 

This brings us to our next question.

Why does the price of gold and silver change?

The last comment I made about people trusting gold more than money is important, because it is a major reason why the price of gold moves.

The idea that gold is a very safe store of value – it's called a safe haven – means that investors tend to buy it when the rest of the world looks risky. Do stocks suddenly crash? Buy gold. Does the world economy look like it's going downhill? Buy gold. On the other hand, if interest rates start to rise or stocks do well, investors tend to sell gold, because they can get a better return on those assets and don't really feel the need for a safe haven.

Silver is a bit more complicated. It is partly driven by the same safe-haven mentality as gold, but sometimes has actual supply and demand movements, if, for example, the electronics industry experiences a surge in demand for this material.

Silver is also bought and sold much less than gold, which means that its movements can sometimes be influenced by some traders. A large institutional investor could influence the price of silver much more than gold on any given day.

 

How can I invest in gold and silver?

There are several ways to get cash from investments in gold and silver – has anyone got the pun?

The easiest way, of course, where you can open a Pocket Metals and invest in the price of gold and silver immediately, 24 hours a day.

You can physically buy gold or silver pieces. Many central banks sell you high purity silver and gold bullion or coins directly, and you can store them somewhere safe, waiting for the apocalypse to come or for the price to rise.

Another way is to invest in mining companies that extract these metals. They directly benefit from price increases, so their share price tends to move in the same direction.

Whichever way you decide to go about it, keep in mind that, contrary to what my mother says, there is no guarantee that either metal is going to increase in value. What is certain is that many investors still like to invest in them.

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