If you have been paying attention to gold and silver prices recently, you have noticed that the price of both metals has dropped. Just this week, both silver and gold have seen 1% losses in a day. However, despite this short term loss, most experts believe we are in the midst of a long-term upward trend for gold and silver. Let’s look at a few reasons why.
For the past 12 years or so, gold and silver prices have been in a near-perfect uptrend pattern. This pattern has seen a consistent range of top and bottom prices for a given time period, but that range has also increased over the past decade. In other words, if you look at a trended price of either metal since the early 2000s, you will see a steady upward trend. If you examine the details of the trend line, you will see peaks and valleys, representing short-term growth or loss, but in the big picture, the trend line is consistently gaining.
Also, the gold price and the national debt ceiling are very closely related. Since 2000, the debt ceiling has continuously grown in the U.S. Nearly parallel to that growth chart is the trending price of gold in U.S. dollars. As the country’s debt(and debt ceiling)has increased, so has the price of gold.
Global Central Banks have become physical gold buyers, causing an increase in demand, and thus, a gradual increase in price. Since 2009, Central Banks have been acquiring more physical gold than ever before. This is a good indication of gold’s long term value and growth potential.
Despite these trends, the global supply of gold and silver is not keeping pace. This means that as demand increases and supply decreases, prices will also very likely increase. Gold and silver are not nearly as easy to find and mine as they were in previous centuries. As more gold is acquired by banks, organizations, and individuals, supply will continue to decrease.
For these reasons and others we have written about, we recommend you consider investing in gold and silver at your next opportunity. All indications point to long-term growth of both metals, and given that we’re in a reduced price market currently, the time has never been better.