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Are you wondering whether investing in precious metals is right for you? Here are 12 compelling reasons to invest in gold and silver.
No doubt you have seen the headlines about inflation and the dwindling value of fiat currency. At some point, you may have heard that gold and silver are “real money” and safeguards against future economic collapse.
But beneath all the sensational headlines, what’s the real story? Should you invest in gold and silver? Or, are precious metals a good investment right now?
As with most things, the full answer is too complex for a single blog post to cover. However, one thing is clear: investing in gold and silver is both helpful and important.
That doesn’t mean it’s always clear how to invest in precious metals as a beginner, however. Every investment strategy involves some kind of learning curve. If you’re just starting to think about precious metals, you probably have some questions.
To begin with, why should you take gold and silver investing seriously in the first place? What are some specific reasons for investing in silver and gold?
Here are 12 compelling reasons why you should add precious metals to your portfolio.
1. Gold And Silver Are A Private Investment
In our technologically advanced, connected world, privacy has become a common concern. This is especially significant when it comes to one’s financial life. You may not want the whole world knowing your net worth, and you would probably like to keep your savings a secret.
Most assets like stocks, for example, require you to work through an online brokerage. Any ownership of shares in a publicly owned company is considered public information.
Even your savings account might not be as confidential as you would like to think. After all, your data is stored online somewhere, and that means hackers and third parties could conceivably access it.
On the other hand, ownership of gold and silver is private information. You can keep the amount you’ve invested in precious metals a secret, and it’s unlikely—if not impossible—for anyone to find out how much you have.
If privacy is a big concern of yours, gold and silver investments might be your best choice.
2. Gold And Silver Are Tangible Possessions
Stocks and bonds, cryptocurrency, and even digital savings accounts all have a significant drawback: none of the money is real. The value of those assets depends entirely on how strangers in the market feel about them at any given time.
Of course, the value of precious metals goes up and down with the market too, but unlike digital assets and cash, precious metals continue to be valuable during economic downturns, especially gold.
Even if the whole world’s economic system collapsed—and that could happen—gold would still hold value.
Gold and silver are real assets that you can touch and feel. If owning tangible resources matters to you, then precious metals should be on your radar.
3. Precious Metals Are Running Out
Why are precious metals “precious” in the first place?
There are two reasons: for one, it’s because they’re valued for either their aesthetic beauty or their practical usefulness. Many precious metals are essential components in electronics, for example.
The other reason is that, unlike fiat currency that can be printed indefinitely, precious metals are a limited supply.
To say the world is “running out” of gold and silver might be a bit of a stretch. After all, there’s no telling how many new mines may be discovered in the future. But it’s no exaggeration to say that the demand for precious metals is increasing disproportionately to the supply.
The more people and nations buy up the gold and silver in circulation, the harder it will be to get any. If you want to add precious metals to your portfolio, now is the time to get started.
4. Silver And Gold Will Always Have Buying Power
If you’ve ever worried about the stability of the American dollar or fiat currencies in general, you’ve probably questioned whether gold could be an appropriate alternative.
Although trading gold and silver isn’t as straightforward as spending cash, that doesn’t make it an inferior option. For one thing, unlike cash, gold and silver tend to hold their value (and increase in value). Using gold for your savings and only liquidating it when you need to make a purchase means your money can go further.
And as we’ve already discussed, no matter what happens in the future, gold and silver will still be valued assets. Who knows—we could end up living in a world where the only widely accepted currencies are gold and silver coins. It’s happened before, after all.
5. Silver And Gold Are In High Demand
As we stated earlier, the demand for precious metals is increasing faster than the available supply. That doesn’t mean you can’t buy it—it just means it’s going to keep getting more expensive. However, this can be a good thing.
When you invest in an asset, you hope that the resources you buy will be worth more later. People don’t typically buy stocks or crypto just to own them—they buy them hoping to eventually sell at a higher price.
This makes gold and silver excellent choices for traditionally minded investing. Although their values fluctuate a little, over the long term, they’re likely to only go up. Precious metals you buy today could be worth considerably more a decade from now.
Looking to invest in physical gold? Check out our collection of gold bars and coins here.
6. Precious Metals Are A Safe Haven Investment
Metals like gold and silver are considered “safe haven” investments. This means that investing in them is widely considered to be a safe move, at least as far as current investment options go.
The reason for this is that most types of assets are experiencing a bull market all at the same time, meaning values are increasing dramatically. The problem with this is that the rate of increase is unsustainable, and eventually the bubble will burst.
Real estate is still considered by many to be a safe and reliable investment option. However, the extreme costs of land mean real estate has a high barrier to entry. Investing in precious metals is more accessible for most people.
7. People Are Losing Confidence In Fiat Currencies
It’s no secret that stocks, bonds, and crypto-assets are only worth what the market decides. Cash works in nearly the same way: it only works as long as enough people agree that it has value.
In our shifting world, that may not be a safe assumption to have for much longer.
People around the world are rapidly losing confidence in fiat currency, especially the U.S. Dollar, the world’s standard. Some people feel that cryptocurrencies like Bitcoin might be the solution, but gold has a stronger historical track record.
There’s no questioning that crypto assets will have a place in tomorrow’s world, but it’s best not to rely on a single asset type, especially one that’s completely intangible. If you want to prepare for a post-cash society, consider precious metals
8. Gold And Silver Are Universally Respected
The world’s currencies may not be based on a gold standard, but precious metals are still highly valued. No matter where you go in the world, practically every society on earth prizes gold and silver.
Gold especially is widely respected for its rich history, as well as its modern-day value. Gold doesn’t corrode, and can be melted over a common flame, and is uniquely beautiful compared to other metals. Gold and silver alike have been woven into many cultures’ history for thousands of years.
Compare this to fiat currency, which is only valuable within the nation where it was printed. Or stock and crypto investments, which can only be accessed and traded from a computer (and only if the global economy survives).
For real money that’s respected no matter where you are, nothing compares to gold and silver.
9. Fiat, Stocks, And Crypto Are Volatile By Comparison
We already mentioned that things like stocks and bonds, cryptocurrency, and even cash aren’t tangible assets. Not only does this make them less inherently valuable, but it also makes the value they do have quite volatile.
There are hundreds of new crypto assets vying for investors’ attention. Sometimes, early adopters of these assets get lucky and become rich almost overnight. More often, they lose money to coins that either didn’t gain enough traction or were outright scams.
The stock market is the safer, more traditional way to invest money. But that doesn’t mean it’s without its risks. People unfamiliar with stocks and investing invariably lose money when they try to get started.
The fact of the matter is, no investment option is entirely risk-free. But gold and silver probably come the closest. For dependable investments with enduring value, nothing surpasses precious metals.
10. Gold And Silver Have A History Of Holding Value
Earlier, we mentioned briefly that gold has a stronger historical track record of remaining valuable than cryptocurrency. What this means is simply that, in nearly every period of history, gold has remained a valued commodity.
When early societies and their monetary systems collapsed, like the Roman Empire, gold automatically became the standard again. Even in the modern period, when economies collapse, they make their way back to a gold standard.
As we said earlier, alternative assets like cryptocurrencies will no doubt be useful in the future. But if we want to truly learn from what history has taught us, we shouldn’t neglect silver and gold.
11. The World Will Flock To Gold If Fiat Collapses
We already pointed this out in the last section, but it bears repeating. If the world’s monetary systems collapse, it will most likely return to gold.
You can already see this happening simply from the way gold is given so much attention. Governments and markets may still be relying on fiat, but ordinary people are starting to place their trust back in tangible assets.
12. Precious Metals Are An Inflation Hedge and Deflation Protection
Gold has long been seen as an excellent hedge against inflation. This means that, when the value of fiat currency goes down, the value of gold naturally goes up. So while the money in your bank account might be losing value, any gold you own should be increasing in value.
Having gold on hand can also protect you against deflation, such as during depressions or recessions. During the Great Depression, the purchasing power of gold skyrocketed, meaning people who had gold could buy more with it.
We live in a changing and uncertain world, and one of the best ways to stay afloat is to do those things that have always worked. In many ways, investing in gold and silver is one of those things.
Invest In Gold and Silver With Sprott Money
You now have 12 reasons to invest in gold and silver. By now, you can see why precious metals are an important part of any portfolio. Now that you have this information, where should you go from here?
When it comes to where to buy and sell precious metals, you have a lot of options; however, few of them equal the value and expertise of Sprott Money.
Offering a variety of precious metals and an insured with segregated storage program, Sprott Money provides a convenient way to start investing in precious metals. Learn more about our services and contact us today to get started.