The economy is always changing, and these days it seems like it’s changing more frequently than ever. With stock markets on the rise, many investors are asking themselves: what happens to precious metals when the stock market crashes?
While no one can predict with any certainty if or when this will happen, there are ways to protect your assets against inflation and market-based shocks. Precious metals like silver and gold have historically held their value better than other investments during times of economic turmoil.
In this article, we take a look at what happens to precious metals during times of crisis and discuss some of the steps you can take to ensure the validity of your assets. Stay with us to study more.
Top Precious Metals
Precious metals are valuable because they’re rare, durable and easy to store. Gold has always been considered an investment staple, but other precious metals like silver, platinum and palladium are also worth investing in. Here’s a list of some of the most popular:
- Gold: This metal is often used as jewelry but can also be bought in bars or coins. It’s sometimes called “the king of metals” because it’s been used as currency for thousands of years–and will likely continue being so for many more centuries!
- Silver (or argentum): Another popular investment choice with long-standing value; most people use it as jewelry but some buy it as an alternative investment option or simply because they love its color!
- Platinum (or platina): This rarer form of silver makes great jewelry pieces due to its high resistance against tarnishing over time. However, you should note that it may cause allergies when worn around other metals such as copper or zinc.
Precious Metals Act as Safe Haven Investments
Precious metals are an investment that can protect your assets against inflation and market-based shocks.
Gold and silver have been used as money for thousands of years, so they’re good hedges against inflation as well as rising interest rates. They also have historically held their value better than other assets during times of economic turmoil, which makes them a wise choice for investors who want to protect their wealth in uncertain times.
The biggest reason investors buy gold is that it has historically held its value better than other investments during times of economic turmoil. Gold has been used as a store of wealth for thousands of years, and it remains an attractive option during times when people are concerned about inflation or rising interest rates.
Gold also provides protection against market-based shocks, such as the recent financial crisis that led to sharp drops in stock prices around the world. Investors who own gold bullion coins can use them as collateral when applying for loans from banks or other lenders who accept precious metals as security on loans.
History of Precious Metals for Safeguarding Value
We now look at the history of precious metals and how they are known to safeguard and maintain their value.
Gold Maintains its Value
Gold generally holds its value better than the US dollar – in fact it has not lost value since 1933 when Franklin D Roosevelt took the US off the Gold Standard.
During times of economic turmoil, investors will often turn to gold as a safe haven investment. Inflation is also another reason why people invest in gold; as inflation increases so does demand for precious metals like silver and gold which can be used as an alternative currency because they maintain their purchasing power over time.
Finally, if you believe interest rates are going up then investing in precious metals may be beneficial because they do not carry any interest rate costs like bonds do – this makes them ideal hedges against rising rates of return
Silver has been Used as a Currency Throughout History
Silver has been used as currency throughout history. It is a precious metal and more abundant than gold, which makes it an excellent store of value. Silver coins were used as currency in many cultures, including ancient Rome, Greece and China.
Today you can buy silver bullion bars that are minted by governments around the world or private refiners like Johnson Matthey (JMC). If you want to keep your investment safe from being stolen or damaged during a stock market crash, then storing it at home may not be the best option since there is always risk involved with handling physical assets such as these precious metals.
Store of Wealth
Both gold and silver have been used as a store of wealth by many civilizations across the world for thousands of years. Gold has been used as currency throughout history, but it’s also valuable because it doesn’t corrode like other metals and is resistant to oxidation–making it an ideal material for making coins. Silver has been used as currency since ancient Greece, when Athens minted its first silver coins called drachmas.
Because these metals have long histories as stores of value, they tend to hold their value well during times of economic uncertainty or crisis. They’re less likely than other assets (like stocks) to lose value when stock markets crash or currencies decline in value due to inflationary pressures.
Hedge Against Interest Rates
In recent decades,gold investment dealer have also used precious metals as a hedge against inflation and against rising interest rates. Gold has been valued as a store of wealth by many civilizations across the world for thousands of years. It’s rare and can’t be produced at will like other commodities like wheat or oil.
Gold was used during times of war to pay soldiers’ salaries because it was easier to transport than coins made out of precious metals. In fact, gold is still considered legal tender in several countries today (including Canada).
Unlike most other financial markets, the prices in gold and silver rarely move up or down on a day-to-day basis; they only move when there’s an actual change in supply or demand for those metals (or both).
Investors Should Consider Precious Metals During Stock Market Crashes
Investors should consider investing in precious metals because they historically hold their value during periods of economic upheaval. Gold and silver have been used as currency for thousands of years, and today they are still considered one of the most stable investments available to investors.
Gold and silver are tangible assets that can be used to buy other assets – including other precious metals. These two commodities also provide investors with a hedge against inflation, which occurs when the purchasing power of money decreases due to rising prices or falling wages.
The value of precious metals is not tied to the stock market, so you don’t have to worry about losing your investment when the economy takes a downturn. If you’re looking for a way to protect your assets from inflation and market-based shocks, investing in gold or silver may be right for you!
If you’re interested in investing precious metals to diversify your best gold coins for investment portfolio and looking for a precious metal exchange dealer, contact Orion Metal Exchange. You can select from a wide range of silver, platinum, and palladium products.
Contact us today to make the most of the benefits of investing in precious metals!