Precious Metals Investing in 2014

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In response to worries about economic contraction and illiquid global financial markets following the Financial Crisis of 2008, the United States Federal Reserve made the decision to further their previous quantitative easing policy efforts by initiating a bond and mortgage backed security bond buying program.  This program eventually reached a peak of $85 billion per month.  However, the Federal Reserve under the new helm of chairwoman Janet Yellen, have made the decision to start tapering the $85 billion monthly program by $10 billion in January, with further tapering efforts to continue as we progress through 2014.

The demand for fabricated silver assets looks to continue its positive trend in 2014.  This is in accordance with widespread predictions that the precious metal market is set to have a strong year across the board in the coming year.  Both fabricated and raw precious metal markets are predicted by analysts and experienced speculators to perform better than other types of safe haven investment options with the onset of the Federal Reserve’s tapering of their monthly bond and mortgage backed security buying program.

Many experts believe that the sales of rare silver and rare gold coins are expected to continue whilst the economy experiences frequent fluctuations.  The drop in the spot prices of silver and gold in 2013 means that now is probably a good time to find really good deals in the tangible precious metal asset marketplaces.  The speculation of rare gold and silver coins is very broadly affected by the fact that the United States dollar seems to be doing stronger as the economy continues to recover to pre-Financial Crisis levels.  However, many other economies around the globe are currently struggling against rising levels of domestic inflation.  This combination of a stronger United States dollar and rising inflation in many countries around the globe is great news for those investors who are looking to diversify their portfolios by moving their assets into safe investments such as precious metal assets.

One of the uniquely positive things about rare silver coins is that even a broadly bearish precious metals market, their dual value and their general solvency makes them stand out as a positive earners in a largely negative industry environment.  The fact that the spot prices of silver and gold have dropped over the past year to $21 and $1300 per troy ounce means that there is a likely significant shift to investments in fabricated precious metals in the coming year.  Typically when speculative efforts do not succeed in the precious metals market, the idea that becomes the real driver of the market is the concept of consolidated value.  The level of sales of rare silver coins are usually connected to the level of sales in the collector auction market.  In reality, long term investors in the precious metal marketplace are not really affected by short term market volatility.  This means that investing in rare silver coins is basically a risk free proposition.

Investors who are considering whether or not to invest in rare coins or the precious metal assets market at large should consider the outlook for the industry in 2014.  The expected moderate inflation which is predicted to occur as a result of the Federal Reserve’s recent decision to begin tapering their monthly bond and mortgage backed security purchases will have an outstated effect on the economy.  Most economists believe that we will see a bull market for precious metal asset classes of all types, including exchange traded funds (ETFs), mining stock, mutual funds, options and futures.  This is because of the expected increase in the federal funds rate, which will cause risk averse investors to switch to precious metals investment.  This is one reason why silver is a strong choice for investors in 2014.