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Precioius Metals Investing in the New Year

Section: Issues

Throughout 2013, it became clear that many experts were wrong. So many thought that the precious metals bubble was going to burst, and they pointed to a drop in gold prices as proof. However, things didn’t happen quite the way they expected. In fact, by the end of the year, there was a clear winner in the world of precious metals: palladium. While gold, silver, and platinum all dropped somewhat in value, palladium skyrocketed. This may leave you wondering, what will happen in 2014, and is precious metals investing the right option?

Understanding Demand

Why did palladium go up so much in value? It’s a simple issue of supply and demand. There is very little palladium left in the world. In fact, no one really knows how much of this metal is left. There have been issues with mining for a while now, and that raises numerous different questions. Anytime people are unclear on what is left of a commodity, they consider it even more valuable.

Palladium is used to make catalytic converters in vehicles. This important auto part helps control vehicle emissions and is a vital piece for environmental control. As the economy has started to bounce back, more people are buying vehicles, and that means more catalytic converters are needed. This pushes up the demand for the precious metal as well, and it helps you understand how precious metals investing can be the right decision.

What the Big Boys Think

Of course, when you are attempting to choose the best way to invest your money, it’s always a good idea to see what the major institutions think and have to say. When it comes to precious metals investing in 2014, the big boys (companies like Bank of American and Merrill Lynch) seem to agree on a few things.

They expect gold to continue a slow downward pace. Silver should start performing much better than it has lately. Platinum should start a move upward, but may follow a similar choppy path as gold. Palladium, however, is expected to continue skyrocketing.

Determining Whether to Invest

If you are interested in precious metals investing, then you do have to understand what may be coming in the future. Savvy investors should keep in mind that precious metals continue to be a good option for long-term portfolios. However, investors should also understand that they need to be very careful with the decisions they make.

Of course, the precious metals market continues to be strong, and it will grow if the economy gets shaky again. However, there could be some choppy times ahead in 2014, especially for those who have invested in gold. This doesn’t mean to avoid investing. Instead, it means you have the perfect opportunity to build up a portfolio while prices and growth are unclear. Then, in the long-term, your investments will hold strong.

Keep in mind, after all, that precious metals investing isn’t designed to be a quick flip. You cannot treat gold, silver, platinum, and palladium as if they are a day trade stock. If you try to do this, you likely will not make any money. However, if you understand that your portfolio may have to weather a few storms and hold out for the long run, then you can see why you should get started investing today.

Precious metals will always be a world that investors turn to when they feel uncomfortable with the stock market and with currencies. There aren’t that many of these metals left to mine as well, and that means supplies will continue to dwindle. Over time, their values will go up, and you can build a strong portfolio if you start investing now.

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