How Will Our Trade Policies with China Affect Precious Metal Prices?
If you follow gold trading prices, you know that gold prices have risen by more than 40% in the last few years. One reason experts cite is the current distrust between the U.S. and China. And chances are that distrust between our two nations will only rise as the U.S. builds scrutiny of why the Covid-19 virus might have arisen in Chinese laboratories.
As trade restrictions and tariffs increase, the prices of gold and other precious metals seem likely to continue to rise.
Yet there are more reasons why trade patterns between the U.S. and China could cause the prices of gold, silver, and platinum to rise even more. Let’s take a closer look.
Limits on the importation of solar panels from China will increase
As we publish this post, the U.S. government has announced a ban on the imports of some Chinese-made solar panels, because of the exploitation of the workers who manufacture them in China. Another trend is that some Chinese panels seem to be made using processes that cause pollution.
At the same time, the demand for solar panels in the U.S. is on the rise. The result of these trends will probably result in an increase in the value of silver scrap. Why? Because solar panels are made with silver. And when the demand for a substance rises, the price rises too.
Increasing tariffs
The U.S. has increased import tariffs on Chinese goods that are coming into our country. At the same time, China has retaliated by increasing tariffs on U.S.-made goods that are imported there.
Although the effects these tariffs will have on the demand for gold and silver especially are difficult to estimate, it has become clear that gold prices have risen as a result. Why? Because when other investments become unsteady, investors have traditionally looked to gold as a trend-resistant investment. And let’s face it – uncertainty in our trade relations with China seems likely to last for the long term.
Disruptions and shortages in the supply chain
In light of the current trade uncertainties between the U.S. and China, it seems likely that imports of certain products from China to the U.S. will be hindered, including the importation of popular products like electronic devices, cellphones, and other consumer goods. As production of these products shifts to the U.S., demand for precious metals used in those goods will increase. And as the demand for those products remains steady or rises, the result will be an increase (or at the least, little change) in the price of gold and silver.
How Will These Trends Affect Your Precious Metal Investments?
The simple answer is that the trading and investing prices of precious metals – gold especially – will remain strong. It is a great time to invest in gold scrap, silver scrap, and platinum scrap.
Whether you own those materials already or plan to in the future, now is a good time to plan an investment strategy. To get those plans started or make money in recycling precious metals that you own now, call our experts at 800-426-2344 today.