One of the cornerstone concepts in economics is the law of supply and demand. If the supply of a good decreases, prices for that good will rise. If the supply increases, prices will fall. Conversely, if demand for a good decreases then prices will fall. If demand increases, prices will rise.
When looking at gold, silver, and other precious metals, analysts often look at demand for them to get an idea for whether prices will rise or fall. The statistics about demand for gold and silver are nothing short of incredible. Over the past decade demand for gold and silver from investors has quadrupled. That’s largely a consequence of the financial crisis, which saw stock markets lose over 50% of their value and saw many investors lose even larger portions of their portfolios.
It’s no surprise either that the large increase in gold and silver demand has also led to higher prices. Gold and silver today are both over 50% higher in price than they were back in 2008. With the economy looking set to enter recession and stock markets sure to follow, gold and silver demand will only increase from here as investors seek the safety and security of precious metals to protect their investment portfolios.
Couple that increased demand with reduced supply and you have a recipe for gold and silver prices to go through the roof. With primary production of both gold and silver slowing as mining activity slows amid fewer new mine discoveries, recycling of gold and silver will play an increasingly important role. But that doesn’t come anywhere close to fulfilling current demand, nor will it be able to meet rising future demand.
The future is bright for both gold and silver, which is many savvy investors are choosing to make those precious metals a part of their investment portfolio. The ability of precious metals to maintain their value and even gain in value in the face of economic turmoil is unparalleled. If you’re worried about safeguarding your hard-earned retirement assets, you need to take a look at investing in gold and silver today.
This article was originally posted on Goldco.
