Do you know the going price of gold today? What about silver? If you’re a savvy investor, you should. Though the importance of precious metals like gold and silver as investment opportunities has been somewhat undervalued in recent years, as the Federal Reserve has pursued a policy of quantitative easing, it’s time to pay closer attention to these assets. As financial expert Dawn J Bennett points out, precious metals may finally be getting the credit they deserve for being the most reliable investment opportunity on the market.
What exactly is there to love about precious metals? Precious metals are advantageous to investors because they’re a global currency, they limit inflation, they help diversify portfolios at a low risk to investors, and they’re available in wide variety. Even the former Chairman of the Federal Reserve, Alan Greenspan (who coincidentally introduced our most recent period of quantitative easing), has stated that gold is a good investment. Not only is gold a good investment, Bennett and Greenspan argue, it’s an unparalleled form of currency that remains unaffected by government policies like quantitative easing.
Central banks are catching on to the advantages of precious metals, and have been investing increasing amounts of money into gold in the form of assets as their faith in fiat currency wavers. Yet, as Bennett makes clear, interestingly the price of precious metals like gold and silver has not accurately reflected their current demand. Rather than increasing in value, as we would expect when demand increases, the price of gold and silver has actually decreased over the last four years. Even the current gold shortage we’re experiencing, which should be the most obvious cause for higher valuation, hasn’t been enough to prevent gold prices from falling.
Fortunately for investors, the start of 2015 has marked a turning of the tide. The price of gold has increased 8 percent in January alone, while the price of silver has increased nearly 11 percent. Whether or not this increase in price sustains throughout the year remains to be seen; however, regardless of what happens, investors need to be cognizant of the reality that precious metals will be an asset to their portfolios.