When geopolitics start to get frayed, investors move towards stores of value. As reported by the Financial Times, this has resulted in a gigantic £8.67 billion of gold trades in Europe in March, as nervous investors seek to lower their risk via classic investment methods. The same trends were seen during COVID, when the economic impact of easing had an inflationary impact on metals investment. There are, however, nuances to be observed in precious metals investment. Making the right choice is important, and a little more complicated than simply going for gold.
Of the precious metals, silver holds a special significance in the British investor scene. Silver was once mined extensively and especially so in Wales, which has a cottage industry in Welsh silver jewellery. Indeed, it’s because of this that the Sky-reported sell off of £4.2 billion of British silver was met with anger. Yet, this sale also nods towards a lesson – silver is in a great place in the British economy, and is a reliable wealth reserve. Investors who buy silver will be purchasing a consistent store of value; the price has risen consistently since records began in 1970. With a relatively low buy-in price, you can buy bulk silver without needing to be subjected to part stock agreements or shared commodities.
The pre-eminence of silver doesn’t mean that gold is a poor reserve of currency, however. Gold is still retained in large amounts by the banks, much of it retained in vaults under London’s streets, even if the government has long since conducted its sell-off. According to Which?, gold is being favoured by a new generation – millennials – who are flocking to purchase the precious metal. Given the general degree of insecurity being faced by the younger generations, its of little surprise that they would put assets into gold.
Also consider strategic metals, such as palladium. According to Yahoo, the war in Ukraine has cast doubt over the accessibility of palladium stocks, due to the fact that Russia is one of the leading world producers of the metal. With sanctions in place, they are legally unable to shift their stocks. This means that palladium isn’t just a good store of value, but also a genuine investment opportunity. Palladium is a high-tech metal with multiple applications, and is important in the new green economy. Having a degree of control over its stores, and where new reserves will be found, is something of a pressing need and an advantage in any investor’s portfolio. In the long-term, it will retain it’s place as a store of value and continue to produce value for those holding it.
Precious metals are a common retreat for beleaguered investors, and there’s no time like that the current in which to invest. Whether a classic British stock like silver, or internationally recognised gold and palladium, there’s value to be had.