Timing is everything when it comes to buying and selling precious metals in the marketplace. Many investors in the U.S. have been on high alert regarding the fiscal cliff, possible Social Security collapses, and the housing bubble. Investors are looking to investment vehicles like gold and silver to safeguard their financial future.
There are many pitfalls you have to be careful of when buying or selling precious metals like gold, silver, palladium, platinum, and others, as it can be a risky business. You can educate yourself and learn about dealing in precious metals in a variety of ways. If you intend to do so, it would be best for you to consult a precious metals investment expert as the market is volatile and does change dramatically at times, depending on current and national events and circumstances.
Will the Price of Gold, Silver go Up or Down?
When it comes to precious metals, they still are retaining their value more so than paper currencies or other investments like stocks and bonds. Some analysts believe that the government is manipulating the costs of gold and silver, keeping prices down, so the U.S. dollar doesn’t decline even more potentially inciting civil rioting. In addition, from 1961 to 1968 the US government did attempt to subdue the cost of gold until then President Nixon ended up devaluating the US dollar in 1971. This was called the London Gold Pool. However, this is less possible today because they own less gold then they did now and so it would be harder to do, especially since many government banks are actually bankrupt now and have very little monetary power.
The reason why financial experts believe this is because the government is known to manipulate the cost of other commodities like corn or even the recent problems where the government voted in a farm bill to keep the price of milk going from its current prices to more than $8 a gallon, due to a farm bill approved years ago to subsidize the farmer’s costs to produce that gallon of milk.
Silver Market Gains Big
Silver costs a lot less than gold, and it has actually been rising in value much faster. Right before the December 31, 2012 vote on the fiscal cliff issue, Silver had risen 3.2 percent, and was at $31.18.
Recently Shanghai, China became one of the new and emerging markets for silver futures trading. Some think that this may slow down the price of silver. This is based on the fact that China is well known as a country that has had a great influence regarding the price of gold in past years. China is right behind Mexico and Peru in the amount of silver it produces and the Chinese people have also been growing in their desire for silver products.
Therefore, the silver market investors should prepare themselves for changes that may go back and forth from gains to losses for the first few months of 2013. For example, in 2007, the worldwide market for secondary and mined metals was worth $715.0 billion and then it dropped to $649.4 billion in 2008 and by sometime in 2013, it is expected to grow to more than $894 billion. This means that it currently holds a highly sought place in the industrial market usage in being used in building and construction, as well as in transportation, and in other areas of usage.
Ever since there was a market crash in 2008, precious money investors have relied on the banks to deflate global currency and thus cause gold and silver costs to go up. This is especially true with silver, and silver expert Dan Morgan thinks it could end up as high as $52 an ounce by year’s end. Part of that is due to the increase in the demand for silver in electronics and industrial usage, which is where more than half the demand for silver lies. And if the monetary crisis in the world continues, then the price of silver will continue to rise as well.
2013 Predictions for Precious Metals
According to mining analyst Chris Marchese, the price of silver will most likely end up at somewhere between $35 and $40 an ounce, while the price of gold is likely to get to about $1,800 an ounce.
Some analysts say that gold and silver will outperform the general equities market and do well like it did in 2009. Plus, some precious metals are currently in short supply and this could easily bolster prices in 2013. With other commodities, stocks and bonds heading downward in value, the only true wealth seems to be in precious metals, which are natural resources.
In fact, the fiscal cliff deal in the US sparked a rally already that caused a rise in the prices of precious metals like gold and silver, with platinum going especially well. However, it has since dipped to under $1,650 for gold and under $30 for silver, so it is safe to say that everyone seems to think that the government will still keep putting more money into the US economy.
Another precious metal doing well and predicted to have a good year is palladium, which has had a nine-month high recently. Analysts have made predictions that the demand for palladium could go up to more than 27 tons from previous levels of 22 tons in 2012. Platinum too is doing well and is expected to go higher than $1,725.
Things to Look Out for When Buying or Selling Precious Metals
There are many things of note to consider when you are getting into buying or selling precious metals. For instance, according to the Internal Revenue Service any profits from their sale are considered as capital gains, and you have to report these profits on your taxes. They also have to conform to new brokerage rules under the US Patriot’s Act.
So, if you deal in precious metals, then you need to have proper identification, and keep all of your receipts and records for any transaction more than $10K. You can also purchase them as gold stocks or in other forms like coins, bullion or in jewelry. In fact, these last three things are easier to liquefy than some types of precious metals.
Other Precious Metals and How to Invest in Them
Gold and silver aren’t the only things to invest in during 2013 to help you increase your portfolio and stay financially stable as the world’s financial institutions continue to falter. Precious metals like palladium and platinum are rare and have also grown in value during the last several years. These precious metals are valued because they are used in things like catalytic converters for vehicles. If you do buy some of these metals, you need to keep them at least three years, according to Paul Mladjenovic, who wrote the book, “Precious Metals Investing for Dummies.” Plus, he suggests that you don’t have more than five percent of your portfolio invested in these metals.
Platinum is 10 times more rare than even gold and is in a low supply. It has a very volatile market, which is seen by the example that in March 2008 it got clear up to $2,252 an ounce, but later that year dropped clear down to less than $800 an ounce. You can buy platinum in the form of bullion coins right from the US Mint or from other dealers. One other thing of note is that these metals are harder to liquidate than gold or silver, so beware of that fact. Right now, platinum was selling for a high of $1,584.00 and a low of $1,564 an ounce at press time.
Palladium is not as well known as platinum, but it is needed in industry. It has been selling for around $650 an ounce, which is an all-time high. It too should be bought in the form of bullion coins and even though the US Mint doesn’t have them, you can get them at major coin dealers.
The bottom line is that platinum and palladium may not be for everyone, but they are a good way to diversify your portfolio and have something in it besides the traditional gold and silver products. It is best to have a mix of coins, bullion, gold or silver stocks, and traditional stocks, bonds and other commodities in a financial portfolio to keep your finances safe and make a good return.
All and all no one can really accurately predict what might happen in the next 12 months of 2013. Investors have always been interested in the volatile markets for all kind of precious metals whether it is gold, silver, platinum, or others. These metals have traditionally been much safer as hedges against the high cost of inflation and government financial ups and downs.
If you are considering getting into the investment marketing of precious metals, then you should talk to an expert, who specializes in dealing with precious metals before getting in too deep. You can make a lot of money with these sorts of investments, but you could also lose a lot of money. Be safe, invest wisely and help keep your financial future doing well through the buying and selling of precious metals like gold, silver and more!