What Would a Trade War Do to the Value of Precious Metals?

What will happen to precious metal prices if a trade war causes a number of countries, including the U.S., to charge heftier tariffs on imported goods?

That is a difficult question to answer because so many moving parts, not only tariffs, affect the trading price of metals. Those other factors include interest rates, the law of supply and demand, the strength of the dollar against foreign currencies, and even fashion. (One year platinum engagement rings are very popular, the next year less so, and the value of platinum can vary accordingly.)

Still, it is possible to predict that if a trade war causes the quantity of precious metals that are imported into the U.S. to drop and prices for imported metals rise, the value of the metals you own will increase. If you have a quantity of gold sitting on your shelf or in a vault, its value will go up, even though it might never cross a border.

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What Countries Do Most Precious Metals Come From?

That’s an important question to ask, because it can provide some insight about whether prices will rise.

Let’s look at the world’s largest producers of mined precious metals . . .

  • Gold - China, South Africa, Russia and the U.S. are the world’s top-producing countries. But China is the leader, with upwards of 345 tons of gold mined every year.
  • Silver - Mexico, Peru, China and Australia are the world’s top producers. 
  • Platinum group metals (platinum, palladium, ruthenium, rhodium, osmium and iridium) - South Africa, Russia, the U.S. and Canada top the list.

Notice Any Trends There?

If a trade war erupts, both China and Russia are likely to be among the biggest antagonists of the U.S. China is one of the biggest producers of both gold and silver . . . and Russia is one of the top producers of both gold and platinum. So if a trade war starts, expect the value of those metals to rise, perhaps dramatically.

What Should a Smart Precious Metal Investor Do?

In anticipation of rising trading prices, consider increasing your holdings of gold and platinum. And speaking of platinum scrap, this could be a good time to start piling up old catalytic converters and sending them to us for recycling.

Why not call Specialty Metals Smelters and Refiners at 800-426-2344 and talk to us about refining the platinum and other scrap that you own - from catalytic converters, jewelry scrap, and other sources? If prices are about to rise, this could be a great time to position yourself to profit.

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