Despite a poor 2021, precious metal prices are now soaring in 2022. Gold, in particular, is currently worth $1,920 per troy ounce, up from $1,829 at the beginning of the year, and soon expected to surpass $2,000. Precious metals like gold and silver are a reliable method of diversifying your investment portfolio while providing a long-term store of value and safe haven in extreme stock market conditions. Investing in physical gold or silver, in particular, is a great way for beginners to dip their toes into the market with minimal risk.
Gold: a hedge against inflation.
Gold has been a popular investment for centuries. In addition to primarily being a form of currency, gold is commonly used in jewelry, as well as industrial applications. Investors typically value gold as a hedge against inflation risk; it typically grows in value alongside rapidly increasing consumer prices. Similarly, gold is also considered a safe store of value in volatile times (including war and political instability).
Silver: cheaper alternative to gold.
Silver offers investment benefits similar to gold while also being more affordable. Like gold, silver is also considered a hedge against inflation, however, its value is more influenced by economic activity (this is primarily due to silver’s many industrial uses). When production slows, the value of silver tends to drop. And, when production picks up again, the price of silver rises accordingly.
Physical bullion for beginners.
Investing in physical coins and bars (bullion) provides you with direct access to your investment. With this option, you have plenty of choices with options to suit all budgets. For example, a Canadian maple leaf silver coin has a face value of $5 and remains legal tender. A coin like this from the Royal Canadian Mint is world-renowned. Or, if you’re looking for gold coins, a gold American Eagle coin has a face value of $50. This coin is also minted in 22 karat gold, which increases its resistance to scratches and damage. Remember, you’ll also need to budget for an at-home safe or safe deposit box at your bank to store your bullion.
If you’re new to investing in precious metals, it’s important to research your options to choose the best for you. Gold and silver bullion, in particular, is an easy way for beginners to enter the world of precious metals investing and grow their wealth.
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