These days, it seems as though everyone is interested in capitalizing on the bullish trends that are currently found in global gold and silver markets.
Gold’s status as a safe-haven during turbulent market environments is well known and this means physical precious metals assets (like coins, bars, or jewelry) may continue to climb in value.
But does this mean that it’s the right time to begin buying physical metals like gold and silver? According to Tony Davis of Atlanta Gold and Coin, “starting a coin collection doesn’t have to be difficult. In fact, you can start your collection with coins you might already have. As you begin collecting, start by choosing coin categories and ironing out a personal budget. Then, you’re ready to get started.”
For newer investors, these are important points to remember because trends in the financial market are constantly in flux. Sometimes asset prices rise, but they can also change course and head south just as quickly. With gold trading at elevated price levels, it’s possible that investors will begin selling assets as a way of locking-in portfolio gains that were generated during turbulent market periods.
In addition to this, the negative economic effects of the COVID-19 pandemic have created the potential for market volatility that might be greater now than at any other time in history. Of course, this creates added risk whenever large positions are taken in the financial markets. But given the recent rallies in gold and silver, we can see that market momentum is clearly focused in the bullish direction and precious metals assets appear to be thriving under these conditions of uncertainty.
All of that said, it is absolutely critical for investors to take a measured approach to physical assets in the precious metals space. There is simply no substitute for time spent conducting research individually and a little bit of education can go a very long way in terms of its ability to help investors avoid unnecessary financial losses.
As Mr. Davis goes on to explain, there are several themes investors should consider when establishing an approach to investing in precious metals collecting. “For instance, try considering the coin’s minting (the manufacturing process) and the mintage (number of coins with the same design).”
Ultimately, this tells us that there are many different factors and characteristics that might define the value of any precious metals investment. But this also tells us that many of the market's traditional instruments have managed to find a way of retaining value even in this increasingly digital environment. In my view, this bullish activity is likely to remain well into next year.
Throughout history, gold and silver markets have proven themselves to be a reliable store of value and the world’s current economic context calls for exactly these types of investment vehicles as a way of protecting long-term portfolio strength. Of course, this does not mean that precious metals will completely avoid selling pressure in the quarters ahead because price corrections are possible any time market assets have achieved long-term highs. But it is starting to look as though we are truly on the cusp of historic trend moves when we consider the global buying activity that has occurred this year in gold and silver.
Richard Cox is a personal investor with more than two decades of experience in the financial markets. He is a syndicated writer, with works appearing on CNBC, NASDAQ, Economy Watch, Motley Fool, and Wired Magazine.
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