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PRECIOUS METALS INVESTMENT FUNDAMENTALS

Fundamentals

It is increasingly difficult to maintain and grow capital in a world of rapidly expanding credit, growing global debt, and low interest rates. There are new challenges facing investors like the war on cash, the fragile yet complex financial system, and a general lack of confidence in once trusted institutions. Precious metals provide the ultimate hedge in that they offer zero counter-party risk. They are a store of wealth and rare.

The fundamentals for holding hard assets such as precious metals (gold, silver, platinum, palladium) are quite simple. There are essentially four fundamentals; currency destruction, inflation, geo-political unrest and supply/demand.

Currency Destruction / Inflation

As currencies are created out of this air their value is eroded and with it our purchasing power. Inflation is nothing more than more money chasing the same amount of goods. When this happens prices rise. So as people lose confidence in a currency or see their purchasing power erode they look for assets that maintain wealth. Gold as a rare commodity has maintained its purchasing power over the long term. Over the last fifteen years while the central banks around the world have created trillions of dollars out of thin air, gold has increased over 300% in US dollars.

Geo-Political Unrest

In the early 2000’s geo-political unrest was considered no more than the threat of oil supply chains being disrupted.  Today it is the fragility of relationships, not just between large trading partners but between governments and citizens. We have seen the Arab Spring, the split in the Ukraine, the Syrian war, the Greek default,  Brexit Currency wars etc. Protecting against black swan events like Cyprus’ bail-in or India’s war on cash means having assets outside the banking system that are unencumbered. Hold precious metals as a store of wealth is a way to keep your wealth out of harms way.

Supply/Demand

There is approximately five billion ounces of gold above ground. A commodity that must be dug out of the earth and refined. Five billion ounces of gold set against trillions of dollars in multiple currencies and debts. There is only one billion ounces of silver used in solar power, batteries, water purification, and anything electronic. With over seven billion people on the planet there is simply not enough silver to go around.  Countries like China and Russia are accumulating gold while other countries try desperately to repatriate their gold. In the end there is not enough supply to meet demand. The only way to balance the scale is with significantly higher prices in both metals.

Guildhall believes that hard assets, including precious metals, should have a place in a investor’s portfolio.  Hard assets such as gold and silver offer zero counter-party risk. Beyond the security that comes with hard asset ownership, the fundamentals for gold and silver have never been as bullish as they are today. Protection of one’s wealth is paramount in today’s economic environment.

Below are key points to consider for precious metals ownership


The Real Money Show
To learn more about the precious metals market and hear interviews with market leaders and experts join us at The Real Money Show. Get weekly updates on precious metals markets and hear what the experts have to say.

RRSP Eligible Gold and Silver
Physical gold and silver are now eligible for investment within an RRSP, TFSA, and other registered savings accounts. Canadians can now hold precious metals as part of their retirement portfolio. To learn more click here.

Ways to Invest
Not sure how to buy silver or gold? Some investors wish to own precious metals in a registered account. Others may look to store their silver in a depository. You may wish to simply buy gold or silver and take it home. Learn and explore the ways to invest in precious metals with Guildhall Wealth.


 

Four Fundamentals that are key to consider are:

Central Bank Monetary Policy

Long Term Inflation

Geo Political Instability

Physical Supply and Demand

Time to Buy Precious Metals

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