With the State of the Union just behind us, investors are questioning what is the State of the Market? Where is the Precious Metals Market today?. Where has it been and where might it go? Let’s take a closer look.
The Past and the Present:
So, exactly where has the market been and where is it now? Let’s take a look at Gold first. Since the beginning of recorded history Gold has been a commodity recognized around the world. Gold stayed relatively constant through the 80’s and 90’s but in early 2000’s the price started to increase dramatically, specifically during 2006. As the economy and Wall Street fell, the price of Gold climbed reaching a peak in September, 2011. Since mid-December, 2014 Gold has seen a 10% increase in prices and continues to hover consistently around that mark.
Looking at Silver we see much of the same trend in its history. With a lower entry point into collecting and purchasing Precious Metals, Silver bullion and Silver coins have long been a traditional investment and collector’s item. After the economic collapse in 2008, Precious Metals, both Gold and Silver, went from being traditionally overlooked to a go-to hedge for investment portfolios. Silver reached a nearly record-setting high price on April 28, 2011 second only to the long-standing record holding of $49.45 on January 18, 1980. Just like Gold, the month of January, 2015 was good for Silver showing the connection between the two metals.
With the inverse relationship between stocks and bonds with Silver and Gold, it’s hard to predict extremes but often we can find some expected market behavior. Gold analyst Ronald Stoeferle released a prediction and model for 2015 Gold prices saying “Monetary policy will undoubtedly be the key driver for markets, money and metals in the years ahead.” We will, “experience unintended consequences of these monetary interventions resulting in increasing volatility.”
The chart below from www.gold-eagle.com shows the probability distribution of possible scenarios relating to this same theory.
As always, none of these predictions are certain. The one thing that is certain about Precious Metals, like life, is they’re unpredictable. Do your research, find a reputable purchasing source and go with our gut.
Cheers to 2015.
*The information in this article should not be taken as financial advisement from APMEX. The article is purely information and should only be used to help inform and help develop one’s own opinion about Precious Metals and their future. APMEX is not a licensed financial advisor.