Precious Metals Investing In Times Of War And Peace

More people are beginning to realize that precious metals investing is necessary to position themselves well in times of war and peace. This is because precious metals such as gold and silver are viewed widely as both money and commodity.

Precious metals are not just tangible goods but something of great intrinsic value. Precious metals investing are also tied closely with geo-political and global economic situations. For example, when there is weakness in the economy or fear of inflation, the price of precious metals, especially gold trading price, will tend to inflate. When there is potential geo-political tensions and conflicts such as the current skirmishes between the North and South Korea, it will impact gold trading price – driving it further up.

Precious Metals Investing In Ancient Times

Gold play an important role in war since ancient times. Before the invention of paper or fiat currencies, nations used gold or other precious metals to raise and maintain their armies. This is because gold is the real currencies. The cost of war is paid for mostly in gold. Some of the gold is obtained from taxes or confiscated from conquered lands. The quest for gold has driven the Spanish and English to hunt for precious metals in the New World and Central America.

Precious Metals Investing In Modern Times

Precious metals investing took a new form during and after the second World War. With the gold standard and rapid rise in inflation in some countries, the prices of precious metals went through a wild ride. The wars in the 2oth century like the Soviet invasion of Afghanistan, Iraq’s invasion of Kuwait and subsequent Gulf war caused strong reactions in the gold trading prices. Terrorism has also played an important role in increased precious metals investing. For example, the attack on U.S soil saw a marked increased in people buying gold.

Motivator For Precious Metals Investing

A strong motivator for precious metals investing is Fear. Actual conflicts and war cause jitters, but the fear of potential war can also drive prices of precious metals. This is because no matter how small a conflict is, it could still potential cause political and economic instability. Wars can be expensive and a drain to a country’s resources and can drive up inflation. When that happens, people flock to precious metals investing as a hedge against inflation.

Precious metals investing will also get a boost from fear of devaluation of fiat currencies. For example, when the U.S Federal Reserve announced the Quantitative Easing II in a bid to improve the U.S economy by pumping $600 billion dollars into the market, it drives up gold trading price because gold as traditionally be viewed as a store of wealth.

Even today, there are some catalysts that can drive more people towards precious metals investing leading to more gains for gold and silver trading prices. Hot spots like Afghanistan, Iran and North Korea are areas of potential conflict. The current economic weakness in the U.S and Europe as well as global political uncertainties seems to provide a great boost for gold trading price. Therefore, precious metals investing is essential in times of both war and peace.