What Will Happen to Precious Metals Prices if a Recession Starts?

Nobody likes a recession. But the fact remains that if another recession starts soon, precious metals are a good place to have your assets invested.  

During the last big historical recession of 2007-2009, the trading price of gold rose about 24%. In the same period, the Dow fell by about 35%. And something similar, though not as extreme, happened in preceding recessions. In the less-severe recession of 2001, gold prices rose more than 4%, while the Dow fell about 15%. And a little historical research shows that in preceding recessions, gold not only held its value as an investment, but improved. One reason is that there is a fixed supply of gold, with little of that precious metal coming from mines. Another is that demand for gold remains consistently strong for making jewelry and electronic components.

What about Silver and Platinum?

Silver and platinum are already selling at depressed prices. That means that if another recession begins, their trading prices should increase as investors who are losing money in stocks start to look for other places to put their money. It also means that today, we have an opportunity to invest in both metals while prices are low; we can then hope to hold them while prices increase. If history is any indicator, that will happen.

Even though prices for gold, silver and platinum are likely to be buffeted by very different forces, one good strategy emerges for precious metals investors . . .

Invest in gold, platinum and silver scrap

Why is precious metal scrap your best investment bet – whether or not we enter into another recession? The simple reason is that it is possible to acquire precious metal scrap at very low prices, then unlock the value of the precious metals it contains and make a significant profit.

Here’s a case study that illustrates that process.

John K, who likes to invest in scrap, bought about 10 pounds of plating scrap at a factory that was closing down. The scrap contained gray powder (which turned out to be used platinum sponge that was left over after plating operations), and also about a dozen sputtering targets that contained silver, magnesium and small quantities of gold, also left over from plating processes. He paid a total of about $100.00 for the whole batch. Then he called Specialty Metals Smelters and Refiners. We tested his scrap, and recovered more than $200 worth of gold, platinum and silver from it.

As that story illustrates, investing in scrap can offer a higher payback than buying into non-scrap precious metal investments like bullion or coins.

Want to Know More?

We are here to tell you what you need to know about investing in precious metal scrap. Whether or not a recession happens, we can lay out investment strategies that are more than likely to pay you a significant return on the money you invest buying scrap.

We invite you to give us a call at 800-426-2344 to learn more.