Precious metals are a great investment since they serve as a hedge against the effects of inflation. In simple terms, investing in precious metals—especially silver and gold—can be seen as taking out insurance on your money. There is good reason to believe that inflation will accelerate in the future because central banks around the world are printing money through quantitative easing.
How Federal Reserve Hiking Cycles Affect Precious Metal Prices
The prices of precious metals typically rise from the onset to the close of the hiking cycles of the Federal Reserve. In the most recent four cases in which the Federal Reserve undertook a hiking cycle, investors in gold got +10 to +20 percent returns from beginning to end in three out of the four hiking cycle instances.
Precious Metal Prices and Interest Rates
The outlook of the investment landscape for precious metals is very optimistic. Behind the scenes, worldwide record debt burdens still exist. As a result, the growth of the global economy is highly sensitive to significant increases in interest rates and debt servicing costs.
It is for this reason that economists expect central banks around the world to be highly cautious of increasing interest rates too quickly. Economists also expect that real interest rates—which drive the prices of precious metals—should remain extremely low and possibly become negative with the acceleration of inflation.
To arrive at the current interest rate, subtract the inflation rate of the day from the interest rate that is being advertised. Many participants in the market believe that increasing nominal interest rates are not good for precious metals because they do not pay income. So instead, investors have preferred to simply retain cash, an option which they perceived to be less attractive.
Now, for the first time ever, you can generate a monthly income for owning precious metals! An investment that offers security and good returns in the long-term, as well as the short-term, is one not to pass up. For more information about how to generate a monthly income from your precious metal investment, see our Silver Deposit Account.
The United States Buying Advantage
The market discounts the prices in terms of the Dollar. In other words, people buying precious metals in the United States get them for less than people in another country. Therefore, those in the United States have a temporary buying advantage. This advantage swings back and forth in cycles and, at the moment, it is in favor of U.S. investors.
For example, right now the discount on silver is HUGE and thus offers investors an excellent opportunity for a ton of growth and ensures that their portfolio is diverse. Savvy investors have benefited from the drop in the prices of metals. There is no reason why everyone should not also rake in some cash while waiting on the move up in price. Moreover, as mentioned earlier, you can now obtain a monthly income from your precious metals investment with West Hills Capital, something which was unheard of—until now.
Contact West Hills Capital
Right now is the best time to invest in precious metals, especially silver. Committing a portion of your portfolio to these assets can be one of the best investment decisions you ever made. Call (800) 867-6768 to speak with one of our metals strategists today.