Why Invest In Precious Metals
Protection Through Diversification
Some individuals choose to include precious metals in their retirement accounts as a way to diversify their overall portfolio. Diversification is one approach some individuals consider to help manage exposure to market fluctuations. In times of economic uncertainty, some investors view precious metals as a potential way to balance their financial strategy.
Putting all your eggs in one basket may expose a portfolio to concentrated risk, which is why some individuals choose to diversify their holdings. Including precious metals as part of a diversification strategy may help reduce reliance on a single asset class, though all investments carry some level of risk.
Growth Potential
During times of economic instability, some individuals turn to precious metals, which have historically seen increased demand during such periods. Some analysts point to supply constraints as a potential factor influencing future precious metals prices, though outcomes may vary. Gold and silver CANNOT be printed, manufactured, or mass-produced. So, as supplies become more scarce, the metals become more valuable.
Gold and silver have experienced periods of sustained growth, including price increases over the past several years. In some historical periods, gold prices have increased alongside rising interest rates. Given ongoing economic uncertainty, some market observers anticipate continued interest in gold and silver, though future price movement is not certain. This has led some individuals to explore precious metals IRAs as part of their retirement strategy.
Hedge Against Inflation
Over the past two decades, the U.S. money supply has increased significantly, contributing to concerns about long-term inflation and the dollar's purchasing power. The Federal Reserve’s monetary policy continues to evolve based on economic conditions. Gold and silver have historically been viewed as stores of value during inflationary periods, which is why some individuals include them in long-term financial strategies. Gold and silver prices have at times moved in the opposite direction of the U.S. dollar, which has led some to include them in their portfolios to help manage purchasing power over time.
Growth Potential and More
The essential goal of any investor is to maintain his or her quality of life during retirement. Precious metals can help you achieve this because of the financial benefits outlined above. With a gold-backed IRA, you can have peace of mind knowing that your investments are properly diversified and ideally positioned to protect you from market volatility and any sudden loss of wealth due to economic factors beyond your control. Your retirement holdings should enable you to live stress-free and anxiety-free without constantly worrying about impending economic downturns or a sudden deteriortation of the U.S. dollar.
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Why Gold
DIVERSIFICATION
Many financial experts recognize that diversifying your investments can help reduce volatility and improve your overall portfolio performance. During periods of economic uncertainty, some individuals choose to diversify with assets that may have different market behaviors. Gold has historically shown a low correlation to some traditional asset classes, which is why many include it as part of a diversified strategy. Its performance may differ under certain market conditions, but outcomes are not guaranteed.
Gold reacts to a different set of market conditions, such as peace-of-mind demand in times of political and economic uncertainty, and it has unique properties because it can be used as currency. Gold has often been used historically as a hedge against currency devaluation, although future performance may vary. Many opt to include gold as part of their overall diversification strategy.
HEDGE
Many financial professionals view gold as a potential hedge against inflation based on its historical performance. Historically, inflation has been one of several factors influencing the price of gold. And the more money that the Federal Reserve prints, the less the U.S. dollar is worth. After Nixon took the dollar off the gold standard, U.S. inflation reached its highest level in 1974, 1975, 1979, 1980 & 1981. During those years, interest rates hit an all-time high. The average real return on the Dow was -12.33%, and the average real return on gold was 130.4%.
Today, a range of economic factors — including monetary policy shifts, fiscal stimulus measures, and post-pandemic recovery challenges — are contributing to ongoing inflationary pressures. America is not only the world’s biggest debtor to China, but the Fed has had to incur even more debt and inject billions into the stock market to keep the economy afloat.
Gold is priced in U.S. dollars, and fluctuations in the dollar's value can influence its market price. For now, the U.S. dollar is the world’s reserve currency: the primary medium for international transactions, the principal store of value for savings, the monetary denomination in which commodities and equities are calculated, and the currency primarily held by the world’s central banks. Since the U.S. dollar is no longer backed by gold, some central banks have increased gold purchases as part of their foreign reserve diversification strategies.
TAX ADVANTAGE
You do not have to pay any sales taxes on your acquisition of gold/silver over $1500 in California. Metals can be held long-term, and taxes may apply when they are sold or distributed.
PRIVACY
Under current regulations, certain coin transactions may not require IRS Form 1099 reporting, depending on the coin type, quantity, and transaction details. This means some purchases may not trigger mandatory personal information collection or government reporting. Historically, some numismatic coins were not included in previous U.S. government gold recall orders. Some individuals have used physical gold coins as a way to preserve and transfer wealth over generations.
LIQUIDATION
Gold is recognized around the world as a symbol of timeless wealth. Gold and silver are widely traded and can often be converted to cash. Some financial institutions include certain forms of gold in their liquidity assessments. Gold purchased through Monetary Gold may be resold through various precious metals dealers, coin shops, or exchanges, depending on market demand and dealer policies. Gold is bought & sold 24 hours a day, 7 days a week.
SAFE HAVEN
Unlike paper assets, gold has intrinsic value, and for centuries it has protected the wealth of kingdoms, empires, monarchies, and generations of everyday investors. It has survived the collapse of countless fiat currencies, inflation, deflation, financial crises, and natural calamities. In today’s economy, most investment strategies possess risk, and holding similarly correlated assets alone can put your financial future in jeopardy.
Gold has historically moved differently from some traditional asset types and has been used by individuals, institutions, and central banks during periods of economic instability. It is commonly called the “crisis commodity” due to its historical role during periods of political and economic stress.
Some people choose to include gold in their financial strategy as its value has at times increased when other assets declined, though this is not always the case. In times of rising debt or currency pressure, governments have historically increased money supply, a condition that has often coincided with increased gold demand. Gold prices have sometimes increased during periods of low public confidence in government.
GROWTH POTENTIAL
Over the past decade, gold has moved from a low of $255.95/oz. to a high of $1821.75/oz., reflecting significant price appreciation during a period of economic instability. While past performance does not guarantee future results, gold has experienced periods of sustained growth even as other asset types have fluctuated.
Since 2000, gold prices have increased by over 500%, while the U.S. dollar has declined by 29%.
Were you aware of gold's performance trends during that time?
INCREASING DEMAND
Gold demand has increased in recent years, particularly among some governments and central banks seeking to diversify their reserves. National central banks bought over 456 tons of gold in 2012. Eastern Central banks purchased a staggering 580 tons of physical gold in June 2013, which represents 25% of the world's annual gold mine production, making them the largest purchaser of gold during a 7-trading day trading period in history. Central banks added another 650 tons in 2019.
Central banks have increased their gold holdings alongside other reserve assets, reflecting evolving strategies for currency and reserve diversification. From 2002 to 2012, global gold demand reportedly increased by approximately 600%. Since most spending on gold is discretionary, its market structure is far more diverse than most commodities. About 50% of gold demand comes from the jewelry sector; 38% comes from physical holdings, while technological applications in industry, medicine and dentistry account for about 12%.
DECREASING SUPPLY
Despite consistent demand, global gold supply growth has slowed due to factors affecting exploration and production. In the last 10 years, gold-related exploration efforts have increased, yet global mining production has decreased. Many of the world's largest deposits and high-grade gold veins have already been discovered. Much of the gold ore deposits that are “easy” to mine are now empty, leaving lower-grade or deeper deposits that are more costly to extract and process. With gold's diverse uses in jewelry, medicine, machinery, electronics and other applications, some analysts cite potential challenges in meeting future demand.
Why Silver
DIVERSIFICATION
Like gold, some individuals choose silver as a tangible asset to complement their broader financial strategies. Silver is often called 'poor man's gold' because it's far more affordable than gold. It also holds a unique position over other metals, serving both industrial and personal asset roles due to its wide range of uses.
HEDGE
Some individuals view silver as a potential inflation hedge, especially during periods of currency depreciation. Like gold, silver is a physical asset with intrinsic worth, and it has enjoyed a growth rate of more than 27% over the past five years.
HISTORICAL STORE OF VALUE
Silver was actually the first metal to be used as currency. Silver ingots were employed in trade over 4,000 years ago in ancient Greece. Silver has served as a monetary standard throughout history and is viewed by some as a tangible asset during times of economic uncertainty. Historically, silver has been used during periods of currency devaluation or instability as a store of value. With constrained supply and increasing demand, some market observers believe silver may see upward price pressure over time, though future performance is not guaranteed.
LIQUIDATION
Silver can be bought & sold 24 hours a day, 7 days a week, all around the world.
PRIVACY
Certain precious metal coin transactions may be exempt from IRS Form 1099 reporting, depending on coin type and transaction details.
GROWTH POTENTIAL
Silver demand remains strong due to its widespread use in modern cell phones, solar panels, computers, satellites, switches, robotics and digital technology. Supply constraints and industrial demand contributed to a notable rise in silver prices over the past decade, during which it at times outpaced gold. Were you aware of silver’s performance over the past decade? The growing number of applications for silver has led some to view it as a potentially attractive asset in the current market environment.
UNDERVALUED
Historically, the ratio of gold to silver averaged around 16:1, while in recent years it has been closer to 78:1. If it were to return to historical levels, silver prices would need to rise significantly, though such changes are not guaranteed.
DEMAND
Silver is widely used in modern applications and continues to play a critical role in various sectors. It is used in thousands of industrial applications, and global demand has increased, particularly in emerging markets like India and China.
SUPPLY
While silver is the least valuable precious metal by weight, it is in a very limited global supply. With multiple uses and increasing modern demand, silver has experienced periods of price growth in the past. At certain times, silver market prices have approached or fallen below estimated mining production costs, depending on economic and operational factors. As reported in 2014 by the U.S. Geological Survey, estimated silver reserves were significantly lower than gold reserves, with projections based on then-current rates of extraction. It is estimated that a large portion of historically mined silver has already been used in industrial, medical, and technological applications.