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Reasons Why Precious Metals Continue to Rally


Updated: March 21, 2022

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Editor’s Note:

After several years of a downtrend for precious metals, 2016 has been a year of significant recovery for both silver and gold metal products. Investors of both precious metals have been winners this year, with gold prices up 25 percent to date and silver at close to 44 percent. These gains have likewise prompted a surge in mining stocks as well, with many companies increasing their market valuation by more than 100 percent this year.

Economic Turbulence

The turbulent global economy and looming United States Presidential election are contributing to market uncertainty. Unfortunately, many investors believe we are headed for economic and financial turbulence, if not chaos. In addition, the fallout from the Brexit vote earlier this summer seems to be continuing. The move was precedent-setting, and one many believe will stunt financial growth for both the European Union (EU) and the United Kingdom. Since it’s impossible to know how much EU and the global markets will ultimately be impacted, investors are seeking safe havens for their funds. In times of economic uncertainty, silver and gold metal products are always a good bet.

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Supply and Demand

Another reason why these precious metals continue to soar is good ole’ supply and demand. In the past few years, mining companies slowed down production with the goal of improving efficiency and increasing profit. Meanwhile, demand is strong for both gold and silver. The solar industry needs coupled with global industrial demand have boosted the prices of silver products significantly. The price of gold continues to rise due to investor demand and needs of the world’s Central Banks.

Currency fluctuation is another reason why the prices of precious metals are rising. For example, the price of gold fluctuated yesterday but rose again today to $1,335 per ounce after the dollar fell. Many now believe that the U.S. Federal Reserve will not actually raise interest rates this year, which is also sending investors on the hunt for safe investments.

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