People invest in physical precious metals for three very good reasons. With the increasing value of gold and silver, these investors are afraid they are missing something good. People distrust governments in the current economic crisis and want protection against the devaluation of government currency. Retirement funds have taken a beating in the stock market and certificates of deposits at banks are not paying enough to keep up with inflation. People invest in gold and silver bullion and coins to make money and protect themselves.
People have watched the price of gold and silver skyrocket recently. They want to take part in this profitable market. Precious metals keep their value: for example between 1971 and 1980, gold rose 2400%. Investors, countries and banks are flocking to obtain and store physical precious metals causing prices to rise. Individual investors may follow the advice of EuroPac Precious Metals, a Peter Schiff gold companyhelping people maximize the profits this market offers. This company recommends buying gold coins or bars in 1 ounce, 10 ounces or 1 kilo sizes and silver in 1 ounce coins or 10 or 100 ounce bars. These are affordable, easy to buy and easy to liquidate.
Investors are aware the currency of different countries does not have the same buying power it did two, five or ten years ago. Some denominations are worthless today. People do not trust the governments to stay strong and economically profitable in this global crisis. Gold and silver are easy to transport and store. Their values do not depend on any bank or government; the values are determined by the world market for precious metals.
People are tired of losing money. During recessions or depressions stock in recreational vehicles, luxury items and unnecessary things devalue. If the company goes into bankruptcy or out of business, the stock is worthless. Federal interest rates are near 0%; interest currently being paid on certificates of deposit and savings accounts are below interest rates offered in 1983; the cost of living is not at the 1983 level. Gold and silver coins and bullion will always have value and can always be exchanged for something. Investors are tired of taking a beating on their money and want safety.
The way people protect themselves is by purchasing physical precious metals and taking delivery of them or having them stored in a safe and secure depository. Some people invest in paper-based products like numismatic gold and silver coins; these are coins with a higher value than their actual gold or silver content based on their collectibility and condition. Other people invest in mining stock, mutual funds, futures contracts and options on gold and silver. These investments may offer a higher return potential but come with a higher risk. The investor may be left with a product that cannot be liquidated or no value at all.
Physical precious metals are a safe haven for investors, banks and governments in uncertain times; this is driving up the value of gold and silver. Investors want to participate in the profits and protect themselves from government decisions, stock market crashes and nonexistent interest income from CDs and savings accounts.