Investing in Gold and Silver

Investing in Gold and Silver

5 min read

Lucky for you, there are different ways of investing in gold and silver depending on the market. You could trade gold or mining stocks such as $GOLD or buy physical assets. Precious metals can be volatile. Hence, there is a need to learn about them, how they work, and how to use stock market trading strategies to invest in them. There’s also the good and bad about investing in precious metals. The more inflation there is, the more precious metals run instead of stocks. In other words, the higher the inflation, the more precious metals outperform stocks. 

Investing in gold and silver has a place in an investment portfolio. Gold and silver have been seen as valuable since the beginning of time. When deciding where to invest in a bear market, gold and silver are safe bets. There are limited amounts of gold and silver in the world. This causes their value to run with inflation.

The value of gold and silver can’t be inflated because you can’t print more of them. They’re mined, whereas the dollar is printed.

In the past, precious metals have been seen as safe havens or hedges in a bear market or recession. A haven limits loss in a recession or bear market.

A hedge offsets risk. In other words, you hedge an investment by investing in precious metals.

Investing in Gold and Silver

1. Gold

Let’s look at gold. Gold is actually a pretty neat metal. It doesn’t rust or corrode. It’s malleable and has the ability to conduct heat and electricity. It’s also popular with jewelry and has some industrial uses.

In essence, it has a lot if practical uses as well as being the most popular precious metal investments.

Prices for shares rely on supply and demand. Gold isn’t like that. It does move based a little off supply and demand but is mostly affected by change in sentiment.

In other words, when gold buyers want sell, price drops. When they want to buy, price rises. A lot of people like to own physical gold but there are miners stocks and gold ETFs. Gold miners tend to move with the markets.

When banks and the dollar are unstable, gold is the most popular. When sectors like real estate are down, gold is seen as an investment that is stable. Another effecting factor is war or political crisis.

People want the security gold brings when times aren’t secure. Hence why investing in precious metals is so popular.

2. Silver

When investing in gold and silver, silver moves slightly differently than gold. It’s more volatile than gold because its market is smaller. It’s an industrial medal and also has perceived value. Hence the bigger price fluctuations.

Innovations that require silver affect the price as well. You can trade the ETFs. Trading silver ETFs exposes you to its price movement without buying the bars.

Add this to your portfolio and hedge your investments in lean times. Commodities that have a practical use can move markets.

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3. Physical Metals or ETF’s?

Do you want the physical bars or trade the ETFs when investing in gold and silver? It all depends on your preference. Some people like to do both, while others want the physical bars.

Some people think that the dollar will go by the wayside and that gold will be the currency we use. No one knows that for sure, though.

Everyone wants high returns on their investments. Trading ETFs allows you to take advantage of the moves made in the market.

Trading options is a good strategy when trading silver and gold. You can make money when they’re up, down, or trading sideways. 

Patterns

When investing in precious metals, you need to trade the patterns. Believe it or not, some people like to pump up gold and silver.

Don’t listen to the people promising the crash of the dollar; instead, trade the patterns. Patterns allow you to see how other traders feel about the stock or commodities you’re interested in.

Learn what the patterns look like and mean. You’re going to trade bullish harami patterns differently than you would dark cloud cover patterns.

Trading the patterns gives you the best chance for profits. You can get in and out of your trades making money, whereas holding the physical bars, bullion, and coins may not pay off as quickly.

Final Thoughts: Investing in Gold and Silver

Investing in gold and silver is another way to grow your portfolio. Silver is more volatile than gold. If you trade the patterns, you can make money in any market, whether stocks or options

Just because gold and silver have been safe bets in a down market doesn’t mean they always will be. Anything can happen to change the value of gold and silver.

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