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Investing In Precious Metals: What To Expect In 2022


07 December, 2021


Investing in precious metals can be an excellent way to diversify your portfolio. They're often used as a hedge against inflation because their prices in the stock market don't rely too much on currency values' rise and fall. Instead, their values are often impacted by supply and demand, alongside other factors.

As such, the market for precious metals remains volatile, and predictions for their performance for 2022 remain mixed. If you're raring to invest in precious metals, take heed of the following considerations.

Precious Metals Performance In 2021 And Predictions For 2022

The market saw an uptick in the overall performance of precious metals, most notably platinum, gold, and silver, during the second half of the year. These increases are attributed to the strong demand for precious metals, according to the World Bank. The premiere international monetary agency also predicts this uptrend to last for the whole year before decreasing slightly in 2022.

Let's see how each of these top metal choices is faring and how they might perform in the coming year.

1. Platinum

Since it's rarer than its counterparts, platinum attracts higher prices compared to gold. Some precious metals investment sites consider platinum as the best precious metal to invest in, owing to its strong performance. You can check www.oxfordgoldgroup.com/articles/best-metal-to-invest-in-2021/ to learn more about investing in platinum.

As a predominantly industrial metal, the demand largely dictates platinum's prices. This rare metal is used by car manufacturers as automotive catalysts to reduce harmful emissions. The need for eco-friendly cars is expected to boost the demand for platinum, driving its prices up.

Platinum's Prices May See An Uptrend Until 2025

Over several years, investment companies that use algorithms to predict platinum prices have indicated that platinum prices per ounce may increase anywhere from USD 1,185 to USD 1,591. An ounce of platinum is priced at USD 982.92 as of November 29. These investment firms also predict a further hike in platinum's price up until 2025 - ranging from USD 1,489 to as high as USD 1,749.

2. Gold

Many investors view gold as a preferable investment, likely because of its abundance. As such, gold, like its other precious metal counterparts, is traded actively on the market round-the-clock. Investing in gold can be done in three ways: buying gold coins, purchasing shares via an exchange-traded fund (ETF), or trading options on gold futures.

Gold market prices are also volatile and less impacted by supply and demand. This year saw the price experiencing a slight dip in mid-June after the United States Federal Reserve imposed interest rate hikes and unexpectedly cut its bond purchases. The demand, however, picked up slightly, pulling gold prices up towards the second half of 2021.

Data reported that the discovery of a new variant of concern, the Omicron, may have slightly held back gold prices on the market. Although some sectors remain bullish, the head of the US Federal Reserve considers it an economic threat that may negatively impact employment and possibly lead to inflation.

Gold's 2022 Performance Show Mixed Prediction

Gold prices are set to increase in the coming months before experiencing a slight downturn in 2022. This prediction is shared by 38 market analysts and traders. According to the poll, gold prices will likely average at USD 1,841 in the last quarter of this year. For 2022, prices will probably get stuck at USD 1,785, experts further predicted. As of November 29, buying price for gold stands at USD 1,791.50.

3. Silver

Like platinum, silver prices are mainly hinged on industrial demand. However, its market is perceived as more volatile than its yellow metal counterpart. Apart from electronics and the solar power sector, silver is likewise used extensively in the automobile industry. While still priced lower than gold, this white metal performed well this year, owing to increased interest among investors and the spike in industrial demand.

Furthermore, a report states that the global demand for silver rose to 1.29 billion ounces this year. Physical investment in silver for this year is predicted to increase by 32% compared to last year. Overall, silver is said to have outperformed gold in 2021.

Silver Prices To Rally Until 2022

Because of the strong demand and renewed investor interest, the buying price for silver may reach new heights. From its November 29 buying price of USD 22.83 per ounce, an analyst predicts that silver can breach USD 30, or likely USD 50 an ounce during the first few months of 2022.

Final Thoughts

The market for precious metals is volatile, and experts or algorithms can't predict actual outcomes. Multiple considerations impact the market, political issues, and developments related to the pandemic included. With that being said, it's in an investor's best interest not to put their eggs in one basket and to consider spending in precious metals only when diversifying their portfolio.




 


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